Diamond Wheels Pty Ltd v Origin Concepts Pty Ltd trading as OC Automotive [2023] NSWDC 418 | Case summary

District Court of NSW|2023-08-23

Introduction

The plaintiff and defendant are licensed second-hand car dealerships. The plaintiff trades at two locations in Lansvale and one in Cabramatta and the defendant from two premises at Cabramatta, one of which is close to the plaintiff's Cabramatta car yard, "Maureen Motors". The defendant, through its director, Loc Leslie Le ("Mr Le"), made a series of purchases of cars from the plaintiff's Maureen Motors car yard, using a system which has variously been described as "wholesale car purchases" (affidavit of Mr Keomanivong of 3 March 2023, paragraph 6) or "sale by consignment", a system that amounts to the parties agreeing on a price which was to be paid only when the car was sold by the defendant, with the defendant keeping any profits over the agreed value of the cars.
These transactions commenced in or about 2011, from which time between 100 and 200 cars were bought in this way by the defendant from the plaintiff. These were then sold to third parties, and the agreed sum paid by the defendant to the plaintiff. The sales were recorded by both parties on the "Easy Car" system used by dealers to record such transactions electronically. However, a significant part of the defendant's attack on the plaintiff's case arises from the absence of a notebook used by the plaintiff's director, Mr Ken Keomanivong, when dealing with Mr Le, to jot down car sales information in this notebook before it was transferred onto the computer.
The first disputed transaction occurred on 20 February 2014, when the plaintiff bought five vehicles for a total of $91,000. Over the period November 2014 to September 2016, the defendant purchased other vehicles in another six further transactions (13 November 2014, 28 March 2015, 30 May 2015, 22 January 2016, 27 June 2016 and 28 September 2016). The system worked well for some years but then the plaintiff began pressing the defendant to pay the outstanding amounts. In about 2017, the trading arrangements between the parties ceased.

The pleadings and the evidence

These proceedings were commenced by statement of claim filed on 30 January 2021 (as amended on 17 August 2022 (Court Book ("CB") 1-7)). Although pleaded as a claim in contract as well as in debt, the plaintiff states (and the defendant agrees) that the existence and terms of the contract are not in dispute, and the claim has proceeded as a claim in debt only. The parties agree that the onus lies on the defendant to prove it has paid for the items (a varying number of motor vehicles sold by the plaintiff to the defendant) which are the subject of the claim: Young v Queensland Trustees Limited (1956) 99 CLR 560 especially at 562, 569-570; Technology Leasing Limited v Le Guarde Food Services Pty Limited & Joseph Miro Vucetic [2012] NSWSC 185 at [4]-[5]; see also the discussion in Barber v Carrier Air Conditioning Pty Ltd [2004] VSC 475 at [3]-[8].
The defence (CB 8-14) primarily pleads that the statement of claim is "vague and imprecise" and liable to be struck out, but alternatively, while admitting to purchasing "cars from the plaintiff between 2011 and 2016" (paragraph 18) and that "some, but not all" of the cars claimed were purchased (four such cars being identified: paragraph 21), pleads only that "instalment payments have been made by the defendant to the plaintiff on a without prejudice basis since the commencement of these proceedings" (paragraph 20) and otherwise denies the allegations. A claim is made that eight of the transactions fall outside the limitation period (paragraph 25), and the plaintiff accepts this is the case in relation to four of those vehicles.
An additional defence was raised at the hearing. The defendant sought to build on a reference in the defence to a failure to answer a notice to produce for the plaintiff's "register" as being capable of giving rise to an entitlement to a stay of proceedings under s 67 of the Civil Procedure Act 2005 (NSW) ("the Act"). This was enlarged to include documents variously described as the plaintiff's computer records (although these are in evidence as annexures to the plaintiff's affidavit material) and the notebook referred to by the parties (although apparently at Mr Le's instigation: Tcpt, 22 August 2023, pp 62-63) by the name "Colar's Book". The text messages between the parties (set out below) confirm this book was known by Mr Le to be lost or misplaced as early as 21 January 2019. It was acknowledged that this form of relief was not pleaded (Kirby v Sanderson Motors Pty Ltd (2001) 59 NSWLR 119; [2002] NSWCA 44)
The evidence consisted of affidavits from the two directors who carried out the negotiations, namely Mr Keomanivong, who swore two affidavits (3 March 2023 and 4 April 2023) and Mr Le, who swore an affidavit in reply. Both were cross-examined.

Background

At all relevant times since the plaintiff and defendant commenced dealing with each other, Mr Keomanivong, the director of the plaintiff, conducted the plaintiff's car dealership business at the Lansvale and Cabramatta car yards. He said that his brother, Colar, was involved at an early stage, until he returned to his home country of Laos in 2012 to start a car dealership there. Colar returned to Australia in late 2014, at about which time he was diagnosed with colon cancer; he entered palliative care for some months, remaining in Australia, and died in November 2015.
It had been the practice of both Mr Keomanivong and Colar to note down all vehicle sales and payments in a book known as "Colar's Book", all of which details were then entered onto the company's computer records either that same day or the following day.
Mr Keomanivong's evidence was that he, not his brother Colar, had dealt with the plaintiff and Mr Le at all relevant times, and that the only connection his brother Colar had with the transactions was that Mr Keomanivong and Mr Le both continued to refer to the green notebook Mr Keomanivong used to enter details as "Colar's Book".

The first transaction

The first transaction the subject of these proceedings was the purchase of five cars on 20 February 2014 for a total of $91,000. No claim is made for non-payment of the first of these vehicles (a white Ford Falcon with an agreed value of $2,500) because this claim is time-barred, but the other four vehicles are still the subject of the claim. According to Mr Keomanivong (affidavit of 3 March 2023, paragraph 14), Mr Le said: "We will pay you now $1500 [sic] in cash. Origin Concepts will immediately pay Diamond Wheel upon each of these cars being sold."
Mr Keomanivong first entered these details into Colar's Book and then created tax invoice B000004 dated 20 February 2014 for a total of $ 91,000. He was not cross-examined about his claim that he gave this Tax Invoice to Mr Le personally.

The second transaction

The next transaction occurred on 13 November 2014, when five vehicles were purchased. Mr Keomanivong says (affidavit of 3 March 2023, paragraph 13) that Mr Le said: "We will now pay you $15,500 in cash. Origin Concepts will immediately pay Diamond Wheel upon each of these cars being sold."
No claim is made for one of these cars, the 2005 grey Holden Crewmen, as the date of its sale renders it time-barred. Once again, Mr Keomanivong entered the details of the sales into Colar's Book and then on the computer. He created the invoice B000013 dated 13 November 2014 for this transaction and says that he handed it to Mr Le personally.

The third transaction

The next transaction occurred on 28 March 2015, when Mr Le, on behalf of the defendant, purchased five cars for a total of $26,600. Mr Le told Mr Keomanivong: "We cannot pay you any cash now. Origin Concepts will immediately pay Diamond Wheel upon each of these being sold."
Once again, these details were entered into Colar's Book, then entries were made on the computer, and invoice B000017 was created on 28 March 2015 and given to Mr Le.

The fourth transaction

The next transaction occurred on about 30 May 2015 when the defendant purchased five cars for a total of $29,500. This time, the conversation again included the statement: "We cannot pay you any cash now. Origin Concepts will immediately pay Diamond Wheel upon each of these being sold."
Tax Invoice B000019 was created for the sale, and was given to Mr Le in person. Prior to this invoice being created, as was the case with all other transactions, these cars had had their details manually recorded by Mr Keomanivong into Colar's Book.

The fifth transaction

The next transaction was on 22 January 2016, when five cars were purchased for $38,000. Once again, Mr Keomanivong says (affidavit 3 March 2023, paragraph 10) that Mr Le said: "We cannot pay you any cash now. Origin Concepts will immediately pay Diamond Wheel upon each of these being sold."
These were written up in Colar's Book. Tax Invoice B000023 was created, dated 27 June 2016 and given by Mr Keomanivong to Mr Le in person.

The sixth transaction

The next transaction was on 27 June 2016, when the defendant purchased four cars for a total of $23,800. Once again, Mr Le said "we cannot pay you any cash now" (affidavit of 3 March 2023, paragraph 9). Invoice B000023 was created and given personally to Mr Le.

The final transaction

The final transaction occurred on 28 September 2016 when the defendant purchased three cars for $20,500. This time, Mr Le said: "We will pay you now $3,000 in cash with balance of $17,000 to be made immediately upon each car being sold" (affidavit of 3 March 2023, paragraph 8).
Tax invoice B000025 was given to Mr Le by Mr Keomanivong personally.
Mr Keomanivong does not say whether or not he recorded this final sale in Colar's Book, which he describes as "a green colour book which plaintiff also used as a secondary record of stocks being sold to defendant [sic]", adding that "full details of record is being kept in plaintiff's computer system which match Tax invoices and full details of cars being sold." It appears to be common ground that this was his practice.

What financial or other records are there of these transactions?

Two types of documentation are under challenge: the financial and computer records kept by the plaintiff and documentation of requests for payment.
In practical terms, there was considerable evidence of the transactions in question. The accuracy of the Tax invoices, and their provenance, is not in dispute and, although Mr Le claimed never to have seen them before this litigation, their contemporaneity was not challenged and there was no cross-examination of Mr Keomanivong to suggest they are of recent invention. It is not in dispute that Mr Keomanivong sent Mr Le at least two text messages inviting him to come to the plaintiff's premises and look at the computer question. The defendant's challenge, as to documentation, was the unavailability of the green book called "Colar's Book", in which transactions were recorded before being entered on the computer.
Mr Keomanivong gave the following description in his affidavit of Colar's Book going missing: "During one of our routine maintenance and office relocation, plaintiff have [sic] lost Colar's Book. Now the only source recording the details of cars being sold to defendant by plaintiff is the plaintiff's computer record and tax invoices annexed to this affidavit." (affidavit of 3 March 2023)
Mr Keomanivong stated that the information he wrote in Colar's Book was always transcribed into his computer records in their entirety, after each transaction: "Q. Where were these cash payments recorded? A. Back into our system. When we receive it we put it in the system that this car's been paid. Q. Just in your computer system? A. Yes, yes, it's linked to everyone, yep, the comm. Q. Were details ever recorded in a book that you referred to as "Cola's book"? A. That book's whatever's on there, is on the system. Q. But you agree the details were also recorded in a physical book A. Yeah, what is on the book has gone to the system, yes. Q. Just so I understand, what was recorded in the book in terms of the car transaction? A. The car what car he take and the price of the car, that's about it, yep, on that, yeah, but if any car's been paid, we just cross it out, yeah, paid. Q. If the car has been paid it would be crossed through the book? A. Yeah, crossed in the book, yeah. Q. What is recorded in the computer system when a car is paid for? A. Yeah, we go into the system, we put in there as well, "This car's been paid." Q. Those records aren't in evidence, are they? A. Yeah, it's the same. Same book or system it's the same one. Q. Your computer system records - A. Yes. Q. - they haven't been put before the Court, have they? A. The computer? Q. Yes. What's recorded in your computer system A. Yes." (Tcpt, 22 August 2023, p 46(04)-(39))
Mr Keomanivong resolutely adhered to this throughout his evidence. At one stage he was shown the defendant's "EasyCar" records (Tcpt, 22 August 2023, pp 47-48), but no different entry for these transactions (or missing transaction) was put to him (Tcpt, 22 August 2023, p 48). The "EasyCar" records record that the vehicles were sold, but are silent as to the payment of those monies to any third parties (Tcpt, 22 August 2023, pp 53-57).
It was put to Mr Keomanivong (Tcpt, 22 August 2023, pp 52-53) that he had received a cash payment from the defendant in March 2015 and that this payment formed part of a larger sum of $57,100 he had banked on 23 March 2015, which was around the time of the fourth transaction. Ms Maddocks conceded that there had been no plea of repayment of this sum (or of other sums) in the defence.
If those vehicles were sold by the defendant to third parties, there would need to be evidence in the defendant's banking records to show that the purchasers' payments for the cars was banked and an equivalent sum withdrawn by the defendant in terms of cash or a bank transfer from the defendant to the plaintiff.
The defendant does not do so. Essentially, the plaintiff's cross-examination proceeded on the basis that every single car the defendant sold involved the car purchaser handing over the entire purchase price in cash, which Mr Le then simply handed on (presumably after taking his profit over the agreed cost out) to Mr Keomanivong.
Mr Keomanivong denied that any such payments had ever occurred in relation to any of these vehicles. He agreed that he had received cash on occasions but not for the vehicles in question, although he acknowledged one payment of $15,000 in cash that he had overlooked: "Q. Mr Keomanivong, I think before lunch you agreed with me that you had received cash from Origin Concepts on more than one occasion; is that correct? A. One is 750 for the Nissan Pulsar 750 for Nissan Pulsar, yep. Q. I think your evidence before lunch was that A. No, I say the maximum I receive, 10,000. Q. Then do you recall me taking you to that $15,500 payment that's referred to in your evidence? A. I didn't recall that, yes. Q. I can take you to it again now. If you look at page 24 of your affidavit, it states there, "Mr Loc Leslie Le also said we will pay you now 15,500 in cash. Origin Concepts will immediately pay Diamond Wheel upon each of these cars being sold". Do you see that? A. That's what Mr Leslie said, but did he pay it? I think he didn't pay it? Q. He didn't pay it? A. No, he didn't pay it. Q. Can I ask then why your affidavit refers to not having received any further payment from Mr Le? I'm looking at the same paragraph in fairness to you, on page 24? If it helps it's about mid-way through the paragraph and it says, "Until today plaintiff has not received any payment, further payment from defendant for these cars". Do you see that? A. Yep, I saw that. Q. Why do you refer to any further payment if it wasn't the case that you had already received that 15,500? A. So the payment is back in 2014, is that right? Q. That's correct, November 2014 according to your evidence. A. I have to check that this is 15,000 is the cash or something else, or maybe half/half on all of these, we have to check that, yeah." (Tcpt, 22 August 2023, p 64(15)-(49))
Mr Keomanivong said that, when he checked the records, he had received this sum, and the plaintiff's revised total for the sum owed took this into account.
This evidence is also relevant to the last topic about which Mr Keomanivong was next cross-examined, namely that the amount he was claiming had changed considerably over the years. In particular, at one stage he had claimed only $100,000 plus interest of $27,000: "Q. Mr Keomanivong, could I please take you to page 1030 of the court book? Do you have that document, sir? This is a creditor's statutory demand for payment of debt dated 30 January 2021. Is that your signature on page 1031? A. Yes. Q. You would accept that just above your signature it says that the amount of the debt owing by the defendant is $127,600? A. Correct. … Q. As I pointed out, the debt is stated to be 127,600. How did you come to calculate that sum? A. Okay. Mark Smith, he just want to claim in the Local Court for under 100,000 and plus interest, so it's come up to that amount, but there is another amount he can make another claims." (Tcpt, 22 August 2023, pp 60-61).
Apart from this reason for claiming a lesser sum, Mr Keomanivong explained the other variations as being the result of agreeing to drop the claims for vehicles where the transaction occurred outside the limitation period or where he had forgotten to make an adjustment, such as for a vehicle that had been returned due to hail damage, and to include the $15,000 referred to above.
Each of these explanations is either obviously reasonable or supported by documentation. The fact that the total owed has changed does not mean that no money at all, or that such minor sum as the defendant sees fit to admit is all that should be allowed.
The defendant also challenged whether there had been any requests for repayment, the inference being that the length of time before bringing these proceedings and the absence of any such documentation was a clear indication that there were no outstanding payments at all. There do appear to have been exchanges in writing at some stage after the parties retained legal representatives in about 2019. However, the most convincing evidence of the defendant owing money to the plaintiff is Mr Le's response to the text messages sent to him by Mr Keomanivong, which not only confirm that he admitted to owing the money and was prepared to make (and had made) instalment payments, but indicate he was well aware that Colar's Book contents were transcribed onto the plaintiff's computer records and that Colar's Book had been mislaid in or before 2019.

Requests for repayment

Mr Keomanivong gave evidence that as the car yards were so close to each other, he or his staff could visit the defendant's place of business and Mr Le to ask for payment and says that he made "many verbal demands for payment" from the defendant during the course of their dealings from 2011 to 2016, as well as sending text messages and telephoning. It is not in dispute that the defendant purchased at least 100 and possibly 200 vehicles in this fashion from the plaintiff.
There can be no doubt that Mr Keomanivong and Mr Le exchanged text messages over several years. Although the first in time of these to be put into evidence was sent on 15 September 2018, it is evident from its contents that there had been negotiations, telephone conversations and text messages for a considerable time before this particular message was sent.
Mr Keomanivong sent a text message to Mr Le's mobile phone, clearly in response to an earlier message from Mr Le: "Ok, if expired why don't you renew I let you know since last Wednesday. Les I don't like to keep asking but please help me out as you know I trusted you that I gave you the cars for consignment if I am not trusted you I won't do it now you left pain with me".
Mr Le replied: "? That doesn't make sense The payments will be kept up BTW, it's not 2000K u should stop telling people that"
This is one of a series of references to "payments" made by Mr Le, but there is no claim in the form of set-off for these sums and Mr Keomanivong was not cross-examined on it. This text message is also noteworthy for the reference to other people knowing that the defendant owed the plaintiff money.
Mr Keomanivong denied that he had been discussing the plaintiff's claim with other people: "I don't tell anyone you done that to yourself"
Mr Le replied: "What?"
Mr Keomanivong replied: "Who know?"
It is thus clear, from this exchange of text messages on 15 September 2018, that the parties had been exchanging messages for some time and that there was a degree of acknowledgement of the debt by Mr Le which extended to payments and discussions about the debt with third parties.
On 14 January 2019, Mr Keomanivong sent the following text message to Mr Le: "Hi Les, Do you like to come in to see payment history for the cars you took please don't delay you want to know the right figure and I want to finalise as well. I gave you the vehicle from day one because I trust you I hope you understand"
Mr Le replied: "Have you found Colars Book? GD880 was paid over 5 years ago"
The reference to "Colar's Book" is to the notebook which, I infer, was known by then, by both parties, to be missing.
Mr Keomanivong replied: "Every payment on the easy car come in Brother".
This is an important statement, because it is a contemporaneous explanation of the role of this book in sales transactions; they were noted in this book first and then the details in the book were transferred to the "EasyCar" system on the computer.
Mr Le replied: "Ken, I DO NOT OWE YOU $306000 GD880 is in your book saying paid"
Mr Keomanivong repeated his earlier statement: "Let come in".
This may be a typing error for "Les", but the meaning is clear; he is inviting Mr Le to come to his office to see the computer records for the cars where payment was outstanding.
On 28 November 2019, Mr Keomanivong sent a text message to with these words to Mr Le's mobile phone: "Hi Les, when will you start making payment mate. They all chasing [sic] up now. We have tough time as well. Thanks Ken"
Mr Le replied: "Hey mate. I'll get on top of it when I get out. I'm also having a tough time"
On 6 December 2019, Mr Keomanivong appears to have attempted to telephone Mr Le, as he replied: "Sorry, I can't take any phone calls but I can Text."
Mr Keomanivong replied: "Can I call you later". A telephone number has been posted as well.
On 20 July 2020, Mr Le sent text messages to Mr Keomanivong's mobile phone: "Hi boss I hope you well I don't want things to be awkward between you and I"
On or about 27 July 2020, Mr Le texted a photograph (the contents of which are unclear) and the following message on Mr Keomanivong's mobile phone: "I'm feeling better How much am I paying to? What's the total figure $300000?"
Mr Keomanivong replied: "No under $290k".
Mr Le replied with these messages: "What? You still think I owe $290000? Mr. Keo?"
Prior to 19 February 2021, Mr Le sent these text messages to Mr Keomanivong's mobile phone: "Be prepared for that is about to happy [sic: should be "happen"]. You have been warned Ken How much do you want I am spending $23K on this solicitor I am sure your [sic] spending money on Mark Smith How much do you want?"
This appears to have been forwarded on as the message "above was SMS from Leslie".
The next text message (CB 24) appears to be from Mr Le: "Wrong person I'm assuming you want to continue, You weren't supposed to mention that to [illegible]."
Mr Keomanivong then sent a text (CB 25): "Hi Les Any chance that you can pay instalment of the debt $300 weekly please."
The response (CB 25) was as follows: "Hi mate I hope your well I 've allocated my Accountant to find the debits. It's a great disappointment that that little green binder book is missing because you ALWAYS wrote in the book and never had the time to generate as a Tax Invoice If I pay $300 a week when will it stop? $300,000?"
Mr Keomanivong replied: "Les please be aware all those car vehicles [illegible] I won't make [illegible]."
The contents of the text messages and their validity as a business record were not challenged. They make it clear that the plaintiff started pursuing the defendant for the outstanding funds by private negotiations and then, when that did not work, by retaining accountants and getting legal advice.
Although the defendant asked me to draw a Ferrcom inference (Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389) from the absence of Colar's Book, it is not appropriate for me to do so. First, as is set out in Stambolziovski v Nestorovic and Camanaro Prestige Properties Pty Ltd t/as Sydneyhome Real Estate [2015] NSWCA 332, such an inference may only be drawn where a party fails to adduce particular evidence that one would have expected that party to adduce and where the failure to do so is not satisfactorily explained (at [56]); it does not permit an inference to be drawn that the uncalled or untendered evidence would in fact have been damaging to the party not tendering it (at [57]).
It is clear from the text messages that Mr Le had known since 2019 that Colar's Book had been lost, that Mr Keomanivong had been looking for it, that the book was only the first and most informal record of what was put on the computer and that Mr Keomanivong was inviting him, more than once, to come to his car yard to look at the plaintiff's computer records. Second, there is no evidence that this book contained any information which was not transferred to the computer as a permanent record; at best, the defendant is on a fishing expedition in terms of hinting there may be some detail in the book not transferred to the computer records, but without saying what this was. Third, the defendant's complaint that the failure to produce this book in response to a notice to produce warrants the drawing of such an inference when Mr Le had known since 2019 that it was lost is, at best, disingenuous.

The defendant's evidence

The best evidence that Mr Le is able to give, according to paragraph 76 of the defendant's submissions, is that "he does not now (some up to 7 years later) have an actual recollection of how the various cars were paid for". The submissions go on to say that, "in the absence of any documentary evidence such as Colar's Book", Mr Le's claim that he does not remember such payments is understandable.
That is not, however, what the text messages and computer records maintained by the plaintiff reveal. There is no "absence" of documentary evidence of any significance. Mr Keomanivong was not challenged on his claim that he gave invoices contemporaneously and there is no evidence of any inconsistency between those records and the information that would have been entered in Colar's Book. The plaintiff's banking records are also before the court.
Mr Le's claim of having a poor memory of these transactions is, despite the length of time that has passed, inconsistent with statements he did make: 1. He was able to exchange text messages in 2019 and, I infer, earlier than that, about the sums owing without having the blanket memory defects he now claims. 2. His complaint of records being withheld is also disingenuous. As the text messages show, he knew in at least 2019 that Colar's Book was unavailable. As to his claim about computer records being withheld, the text messages confirm that he was invited to attend the plaintiff's car yard more than once to check their records. 3. The text messages also confirm he engaged in negotiations about repayment over this period, including offers to pay by instalments. I am satisfied from his responses that he was well aware at all times that he owed the plaintiff a significant sum of money. I do not accept his evidence that his references in these messages to the approximate amounts owing was a "joke" (Tcpt, 22 August 2023, p 81).
This inconsistent evidence undermines Mr Le's explanation is that he must have paid in cash at times he cannot now remember. The basis for this submission is that, having reviewed his bank statements (not before the court) and having regard to his usual practice (about which I have no information from other staff or customers) and contrary to the statement of claim (which is silent as to when repayments occurred), he must have paid for each of these 31 cars in cash. The Court is asked to infer that these sums must have been paid into the plaintiff's bank accounts by reason of one "example" transaction, namely the coinciding deposit of $57,100 on 23 March 2015 to a particular car sale. The Court is then asked, not only to draw the inference that this deposit must have included the defendant's payment, but to infer that this must be the case with all the payments owing, even though other deposits have not been married up to other bank entries.
A major flaw in this submission is that payments in cash to the plaintiff would require some form of withdrawal from the defendant's account or a transfer, and there is no such evidence. As noted above, Mr Le's explanation is that every single one of these customers paid for their cars in cash which he then redirected to the plaintiff. This, he says, is why there is no entry in the defendant's bank records for these payments to the plaintiff. He has not, however, disclosed these bank statements to the court: "Q. The reason you've done that is because, as you say in your evidence, you don't actually have an actual recollection of paying for these vehicles, do you? A. Apart from my bank statements and the sales documents, yes. Q. You haven't included your bank statements in the evidence, have you? A. I haven't, no. Q. You instructed your counsel that the reason you haven't done that is because the cash was paid by customers to you, and then you would then give it to the plaintiff; correct? A. Not at all times, sir. Q. The case is that you haven't put your bank statements in to evidence, have you? A. No, not as yet." (Tcpt, 22 August 2023, p 83)
Mr Le acknowledged he himself did not keep any records of significance: "Q. And in fact, you didn't keep accurate records of what was owed, did you? A. There's three cars that I questioned, which I've made clear in my affidavit that I know I have paid cash for majority of them, which I handed to Cola or Ken, which who'd receipted in that book that I mentioned in my affidavit, and to text message by text message to Ken." (Tcpt, 22 August 2023, p 79)
Although Mr Keomanivong was not cross-examined about having provided Tax invoices to Mr Le contemporaneously, Mr Le claimed that he had never received them before these proceedings commenced (Tcpt, 22 August 2023, p 79). I find it implausible that busy car dealers would enter into transactions for hundreds of cars over a period of about seven years without even an invoice being exchanged. The fact that he had these Tax invoices in his possession would have been a reminder to Mr Le as to the origins of these vehicles and, as such, of his obligations to the plaintiff to reimburse the plaintiff when each of them was sold.
Although Mr Le claimed never to have seen the Tax invoices, before, he could not, however, deny the text messages: "Q. You'll see there, that's some text messages exchanged between you and Ken. A. Yes, sir. Q. Since September 2018; correct? A. Yes, sir. That's what it says here. Q. Then you say to him, "That doesn't make sense. The payments will be kept up. By the way, it's not 200K. You should stop telling people that". A. Yes. Q. But you accept that as of September 2018, you were of the view that you did owe money to the plaintiff. It's just that you thought it wasn't 200,000 as Ken was A. Nowhere near that, sir. Not even a fraction of that. Q. And again, over the page on 51, you say, "Ken, I do not owe you 306,000". Do you see that? A. The one underneath where it says, when I asked him at the Cola's book, yeah. Q. Yes. Now, if you had kept accurate records, you would have been able to tell Ken what you owed, wouldn't you? A. Yes. That's right. I - Q. So to the extent that you now rely on these "EasyCar" sales, had you kept those records at the time, you would have been able to tell Ken what you thought you owed, wouldn't you? A. I relied on the book that was held in the safe in Ken and Cola's office. HER HONOUR: No, you were asked if you had kept reliable records. WITNESS: No, no. I've kept my "EasyCar" system documents, that's all. HER HONOUR: Well why were you not able to tell him how much you owed? WITNESS: Because it's never been more than a handful of cars, and when I say handful, I meant three or four, not 30. HER HONOUR: Why were you not able to tell him that that was the amount that was owed? WITNESS: I did tell him, your Honour. HER HONOUR: Well it says here - WITNESS: Verbally, over the before these proceedings started, Ken and I have had numerous conversations face to face HER HONOUR: Yes, well you are being asked about these text messages. These text messages are dated what, 14 January 2019?" (Tcpt, 22 August 2023, pp 80-81)
Mr Le's change from inability to remember to being able to recall meetings and conversations which contradicted the text messages is, I find, implausible.
I take the same view of Mr Le giving another example of recollecting contemporaneous material which contradicted the texts, adding that when he referred to the totals owing it was only intended as a joke: "Q. And if you'd paid cash for all of these vehicles, you wouldn't have been saying that. You would have been saying, "Ken, what are you talking about? I don't owe you any money"; correct? A. He was referring to a car that he collected that was part paid for..(not transcribable)..and he was referring to a car that was sold to Grayson line. Q. I put it to you that what he's referring to is the balance of money outstanding from your company to his, not to an individual vehicle. Do you accept that? A. Which I think is one of the same, that it for a car. Q. Then over the page on 53, you say to him, "How much am I paying to you? What's the total figure? 300,000?" Do you see that? A. As a joke, yes sir, I do. Q. And then he responds to you, "No, under 280K", and you respond, "What?" So as of this date, you were of the view that it was still a significant figure that was outstanding; correct? A. In the context of my mindset when I was writing that message, I referred to it as a joke, cause we were still on talking terms, sir. Because if house [sic] look up, we're still talking personally. I'm feeling better and things like that so, sorry." (Tcpt, 22 August 2023, p 81)
Mr Le also claimed to have done business with Mr Keomanivong's brother Colar. He particularly identified one transaction in 2016: "Q. Your evidence is that you agree 1,800; the plaintiff says 2,000. It's the case that you're just mistaken about the 1,800, isn't it? A. No. No, I - I agreed with that one with Cola. I got the car off Cola. I remember that car. Q. You say you purchased that car off Cola? A. One of them, yeah. One of them, cause I remember Cola traded this car in. Q. You're sure that - A. A hundred percent. Q. = the 2003 Holden Astra was with Cola? A. A hundred percent. I am a I'm a freak with regos. Little black Astra, automatic with chrome wheels on it. HER HONOUR: What was the date of the sale? HOPKINS: That's what I'm about to get to, your Honour. WITNESS: The date of the sale from Diamond Wheels, or from Origin Concepts? Q. Mr Le, according to your own affidavit, you purchased that vehicle from Diamond Wheels on 25 May 2016. Do you accept that? That's your own evidence at page 987. A. Yes. Q. You accept that Cola was dead by then, wasn't he? A. I remember the car, sir. I remember. Q. You'd have to be mistaken about that, don't you, because he died in 2015? A. I remember the car. I don't know how long Diamond Wheels had the car for, but that's. Q. How could you remember buying it off him if you bought it on 25 May 2016? A. Cause I maybe I didn't get the car until then, sir, cause I remember the car. Q. Even putting aside the fact that he was dead by then, he was in palliative care with colon cancer in 2015. A. I can't remember when how long they've had the car for before they gave it to me. Q. Mr Le, you're just making up evidence on the spot because you think it's going to help your case? A. No. No, no, I'm telling you, it's a little black Astra. I remember that. Q. This idea that you might have discussed the car many years before buying it is just a fiction, isn't it? A. No. Q. It's certainly not something that's in your affidavit, is it? A. What are you referring to?" (Tcpt, 22 August 2023, pp 86 - 87)
Mr Le's willingness to come up with another version of events when confronted with obvious impossibilities in his account of events is also not to his credit.

The credit of the witnesses

Mr Keomanivong's evidence in cross-examination was consistent with his affidavit. He answered directly and concisely and made concessions where appropriate. He was not caught out in any misstatements or lies.
Mr Hopkins put to Mr Le in blunt terms that he was making up the evidence as he went along (Tcpt, 22 August 2023, p 86). He submits, and I accept, that Mr Le is not a witness of credit. The above examples from Mr Le's testimony are only a few of the examples of his inconsistent, evasive and outright untrue answers. I would not accept his evidence on any issue unless corroborated by independent evidence of undisputed authenticity. This includes Mr Le's own contribution to the keeping of the defendant's "EasyCar" records.
Wherever there is inconsistency between the evidence of Mr Keomanivong and Mr Le, I will accept the former's evidence over the latter.

Conclusions concerning liability

The onus lies on the defendant to establish payment of the debt. I am satisfied that the defendant has failed to do so. Not only has the assertion of payment not even been pleaded, but the assertion that payments must have been made is made as a general inference at best, where the Court is left to examine the banking records at the time of the "EasyCar" sale dates, without any input from either party.
The s 67 submission was put only very faintly in submissions. The facts of this case differ very substantially from decisions such as Palavi v Queensland Newspapers Pty Ltd [2012] NSWCA 182, where the contents of a mobile phone were deliberately destroyed to avoid being ordered to produce them. The circumstances in which Colar's Book was lost were well-known to both parties before this litigation commenced and it has consistently been the plaintiff's position (as the text messages confirm) that all the details in that book were copied into the computer system. In any event, the use of s 67 to stay proceedings due to a document of this kind simply going missing (as opposed to being deliberately destroyed) would be a novel use of this statutory provision.
The plaintiff has succeeded on liability but there remain some disputed issues of fact in relation to quantum.

The vehicles the subject of the claim

A total of 31 cars are asserted to have been sold by the defendant without his having accounted to the plaintiff for the proceeds of sale. As noted above, the defendant does not dispute that many of these vehicles were sold, but there are issues of agreed price and other adjustments to make.
The seven invoices provided for these vehicles are invoices B000025, B000023, B000021, B000019, B000017, B000013 and B00004. The licence plate and make is set out first, followed by the agreed price.

Invoice B000025 1. AF50YZ 2003 HOLDEN RODEO ($3,500): Mr Le's evidence is that this car was received by the defendant upon consignment by the plaintiff, and that it was sold on 8 August 2016. The defendant concedes that there is no evidence that this car, with an agreed value of $3,500, was paid for. 2. AF72DS 2005 HYUNDAI TUCSON ($4,500): The parties agree as to the agreed value of this car. This is one of the cars which the defendant asserted must have been paid for by him in cash. 3. BHT28T 2008 NISSAN NAVARA ($13,000): Mr Le's evidence is that this car was returned to the plaintiff, as recorded on the defendant's dealer management system. The defendant's "EasyCar" Records (CB 1269-1272) records (at CB 1269) the entry "N/A returned" against box "Trust A/c" (see also CB 1270), namely that no sale was made in relation to this car; and (at CB 1271), an entry "N" against the box "How Sold: No sale". The plaintiff agrees that $3,000 was paid but that the vehicle was returned and has adjusted the amount claimed accordingly.

I accept the plaintiff's computations as set out in Exhibit D and the total owing is thus $17,000.

Invoice B000023 1. 2004 VW POLO ASR 29G ($1,000): As Exhibit D and Mr Le confirm, the plaintiff concedes that this car was paid for by electronic funds transfer (CB 989). 2. 2003 HOLDEN ASTRA BM9OXH ($2,000): The defendant concedes that the plaintiff's agreed price of $2,000 is correct but Mr Le claims he must have paid cash for this vehicle. 3. 2009 FORD RANGER DBO12C ($19,000): The value of the car is agreed. Mr Le claims cash must have been paid for this vehicle. 4. 2006 SUBARU LIBERTY CG54PK ($1,800): The value of the car is agreed. Mr Le claimed cash must have been paid for this vehicle.

The total amount outstanding, as set out in Exhibit D, is thus $22,800.

Invoice B000021 1. 2007 SUZUKI GRAND VITARA BEQO7K ($5,500): The parties agree that the price for this car was $5,000, not $5,500 as claimed previously (Tcpt, 22 August 2023, p 41). This amount is reflected in the defendant's "EasyCar" records (CB 1226). Mr Le claimed cash must have been paid for this vehicle. 2. 2001 MERCEDES A160 ($1,000): The defendant concedes this car "may not have been paid for" (submissions, paragraph 29, citing Tcpt, 22 August 2023, p 89). The plaintiff claimed the agreed price was $1,000 but Mr Le thought it was $2,500. 3. 2010 GREAT WALL V240 BPZ68G ($6,000): There was some disagreement as to price, but there was an electronic transfer of $5,000 and $1,000 is still owing, according to the plaintiff. 4. 2010 HYUNDAI IX35 BF97SS ($22,500): Although Mr Keomanivong was challenged as to the agreed value, I accept his estimate. Mr Le claimed cash must have been paid for this vehicle. 5. 1997 TOYOTA RAV4 BBV70Z ($3,000): Although Mr Keomanivong was challenged as to the agreed value, I accept his estimate.

The total amount owing is $32,500.

Invoice B000019 1. 2005 TOYOTA HILUX CD5281 ($8,500): The plaintiff concedes that this car was paid for in part by an electronic funds transfer and that the balance owing is $1,000. Mr Le says that the price for this car was negotiated with Mr Keomanivong's brother Colar. As noted above, Mr Le acknowledged that Colar died in November 2015 and could not have assisted with this purchase in 2016. I accept Mr Keomanivong's evidence that he dealt with the defendant and Mr Le in all of the disputed transactions and that the balance owing of $1,000 is still owing. 2. 2006 TOYOTA HILUX BKU83K ($8,000): The value of this car is agreed. Mr Le claimed that this must have been paid by cash. 3. 2004 JEEP CHEROKEE AQQ61K ($7,000): Mr Le claims he never sold this car and that it was taken by the plaintiff's insurer as one of two cars damaged during a hailstorm (Tcpt, 22 August 2023, p 85). I note Mr Hopkins' submissions about the hail-damaged cars and accept them. 4. 2009 GREAT WALL V240 CD23AF ($3,500): The value of this car is agreed. This was one of the vehicles where Mr Le claimed that cash must have been paid. 5. 1996 TOYOTA COROLLA BE94BP ($2,500): The value of this car is agreed. Mr Le claimed that cash must have been paid.

The total amount owing is $22,000.

Invoice B000017 1. 2003 HOLDEN BERLINA SFZ283 ($4,300): The value of this car was disputed but I accept Mr Keomanivong's evidence. Mr Le claimed cash must have been paid. 2. 2003 BMW 318I BGI30D ($6,500): The value of this car was disputed but I accept Mr Keomanivong's evidence. Mr Le claimed cash must have been paid. 3. 2001 MAZDA TRIBUTE BLG5VM ($2,500): The defendant points to Mr Le's evidence in cross-examination at Tcpt, 22 August 2023, p 85 and to his affidavit at CB 983 and submits that there is no evidence in the EasyCar records that the defendant ever acquired this car from the plaintiff; nor is there any evidence that the car was ever sold. Mr Hopkins also relies upon Tcpt, 22 August 2023, p 85, where Mr Le conceded that it was one of the cars that he obtained. The car is listed on Invoice B000017, which I am satisfied was prepared and presented to Mr Le contemporaneously. There appears to be a suggestion that, if this were the case, this would be one of the cars that Mr Le said he must have paid cash for. 4. 2005 FORD COURIER AG74LP ($6,800): The defendant challenges the agreed value (submissions, paragraph 51) but I could not see that this was ever put to Mr Keomanivong in cross-examination. Mr Le claimed that this car must have been paid for in cash. 5. 2004 TOYOTA CAMRY HP65AM ($6,500): Although Mr Le denied that he was mistaken as to the price agreed for this car (Tcpt, 22 August 2023, p 89), I prefer the evidence of Mr Keomanivong (who was not cross-examined about this). Mr Le claimed that this car must have been paid for in cash.

The total owing is $26,600.

Invoice B000013 1. 2000 TOYOTA TARAGO XCT828 ($6,500): This benefits from a credit arising from the defendant's payment of $15,500 (CB 24), as do the cars at (3) and (4) below. The result is that only $1,000 is owing. 2. 1996 TOYOTA LANDCRUISER WRM 968 ($4,500): The plaintiff concedes this claim for limitation reasons. 3. 2005 NISSAN MAXIMA BK21KL ($5,000): See above. 4. 1999 NISSAN PATHFINDER AK65NV ($6,000): See above.

The total amount after adjustments is $1,000.

Invoice B000004 1. 2003 TOYOTA LANDCRUISER AL1EW ($18,000): The defendant pleaded that the purchase of this vehicle fell outside the limitation period but as it was sold on 20 March 2015 and this is a consignment agreement, the transaction still falls within the period. I assume, in the alternative, that the "cash" argument applied for this and all other cars for which there is no evidence of payment. 2. 2007 TOYOTA LANDCRUISER CB13ZM ($31,000): This is conceded, as are the Jeep and Ford below, for limitation reasons. 3. 1997 TOYOTA LANDCRUISER YGJ903 ($8,000): The limitation argument again fails because the vehicle was sold 12 April 2015, prior to the expiry of the limitation period. 4. 2012 JEEP WRANGLER CGC83M ($32,500): See above. 5. 2004 Ford Falcon AQ27YG ($1,500): See above.

The total amount after removal of the vehicles the subject of the limitation defence is $20,000.

Application of these findings to the quantum of the claim

As the above schedule demonstrates, deductions in relation to certain vehicles were made, largely as a result of acknowledgements in relation to limitation issues and concessions in relation to the agreed price and, in one case, the return of a hail-damaged vehicle. I have accepted the table set out by the plaintiff as Exhibit D in relation to each of the sums claimed and there will be judgment for the plaintiff for $141,000.
I have made an order for costs to follow the event but granted liberty to apply in relation to costs and also interest.

Orders: 1. Judgment for the plaintiff for $141,000. 2. Defendant pay plaintiff's costs. 3. Liberty to apply in relation to interest and costs. 4. Exhibits retained until further order.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 13 October 2023

Diamond Wheels Pty Ltd v Origin Concepts Pty Ltd trading as OC Automotive

At a glance

Court

Decision date

Source

Judgment (26 paragraphs)

Parties

Legislation Cited (1)

Cases Cited (8)