Optima Heating & Airconditioning PL v MCTCC

Optima Heating & Airconditioning PL v MCTCC - [2010] VCAT 2010 - VCAT 2010 case summary — Zoe

[19]

Early in 2008 the applicant was desirous of selling one of its motor vehicles which was a C180 Mercedes Benz vehicle. In order to sell that vehicle, it through Mr Rogulic placed an advertisement. That advertisement was answered by Ms Pavlovic. Ms Pavlovic stated that she had someone who wanted to purchase that vehicle and that she could sell it for the applicant. Mr Rogulic agreed to her selling the vehicle. As a result, after the vehicle had been initially shown to Ms Pavlovic at her premises (on 18 April 2008 at 14 Queens Road, Melbourne), a person representing Ms Pavlovic came to the applicant's premises and drove the motor car away and gave the applicant a letter of authority. That letter of authority had details of the motor vehicle itself, the engine number, chassis number, registration number and also had the date, the name of Mr Rogulic's wife, her address, her driver's licence number and her date of birth and also referred to Loretta Pavlovic - it did not refer to the name YVB but mentioned a number of individuals whom the applicant was giving authority to dispose of the vehicle.
The vehicle was picked up on 21 April 2008 from the applicant's premises by someone from YVB by the name of Robert Mothead. The asking price was $58,000 which was then reduced to $55,000 and subsequently reduced to approximately $53,800.
That vehicle appears to have been sold for $53,800 on or around 8 May 2008. The applicant was given $53,000 worth of cheques by Ms Pavlovic in relation to the sale of that vehicle. One cheque for $10,000 was a bank cheque and that cheque was cleared into the applicant's account. The other three cheques totalling $43,000 "bounced".
There was a complaint by way of conversation between Mr Rogulic and Ms Pavlovic about the cheques "bouncing". Ms Pavlovic apologised saying she had problems and voluntarily said that she would give the applicant a further $2000, which made Mr Rogulic think that there was some genuineness about her.
Subsequently, on 13 June 2008, the applicant received another cheque of $15,000 and then received two further cheques of $14,000 and $14,800 which were deposited on 20 June 2008. However, those two cheques again "bounced". On 1 July 2008, the applicant received a cheque for $14,000 which again "bounced" and was returned on 3 July. Mr Rogulic called Ms Pavlovic and eventually by about August, all but the sum of $5000 (approximately) was paid in respect of the C180. That sum or a slightly smaller sum remains owing.

[20]

In August 2008, Ms Pavlovic knew that the applicant owned another Mercedes Benz model S320 which is the subject of this claim. It would appear that that was a relatively modern car, being 2002 registration, and had only travelled 48,000 kms and Mr Rogulic gave evidence that it was worth $75,000. Ms Pavlovic said that she had a customer prepared to buy the car and, as a result, the car was taken with the applicant's permission by a representative of YVB, a Robyn Ligeti, from the applicant's premises, to presumably Ms Pavlovic's Queens Road premises. At that time, no letter of authority or any documents whatsoever were received from Ms Pavlovic or YVB which, to some extent, distinguished this from handing over of the C180.
The vehicle then came back to the applicant's premises but was then returned to Ms Pavlovic. As time went by, there was no word from Ms Pavlovic and, as a result, Mr Rogulic did a search of the internet. He there found the S320 Mercedes Benz advertised on the internet site "Carsales.com". By the end of September, Mr Rogulic stated that he was becoming suspicious and he went to Ms Pavlovic's office at 14 Queens Road, Melbourne. He described this office as an upper floor office and said there were cars which Ms Pavlovic had for sale in a parking area of the building. However, he did say on questions from me that there was absolutely no signage whatsoever identifying that area as a car sales business but there were some signs in Ms Pavlovic's upper floor office. Mr Rogulic was obviously very impressed with Ms Pavlovic's office which he said was half a floor and it looked good.
In his witness statement, he said that he asked for the return of both cars in September 2008 because he said there was actually $7000 outstanding on the C180. However, no cars were returned and also Ms Pavlovic said that she was paid in full for these cars. Apparently, she also had some repairs done on the S320 on 19 September for $3400 but the applicant was not previously advised of this matter and never consented.
On 6 November 2008, Mr Rogulic again attended Ms Pavlovic's office and Ms Pavlovic refused to deliver the vehicles. Apparently, on 11 November, Ms Pavlovic made another direct payment of $1000 into the applicant's bank account and Mr Rogulic said in his witness statement that he was still $4000 short for the C180 vehicle and he received no payment whatsoever for the S320 vehicle. It turns out that the S320 was sold to a Mr Chau of Glen Waverley and apparently Mr Chau was a bona fide purchaser for valuable consideration without notice of the defect in title. Legal proceedings were taken against Ms Pavlovic by the applicant. However, Ms Pavlovic has disappeared and orders that were made are still unsatisfied.
It also appears that there were proceedings commenced by the respondent against Ms Pavlovic who was trading without a licence and she pleaded guilty in those proceedings. I was told by Mr Lombardi that there were approximately 23 vehicles involved in that proceeding.

[21]

The first question that I must ask and answer is whether the applicant actually believed that YVB or Ms Pavlovic was licensed under the Act. Mr Rogulic certainly stated in his witness statement and in giving evidence that he was of the belief that Ms Pavlovic with YVB was licensed. I have some difficulty in accepting that evidence. I find it difficult to understand how Mr Rogulic could have believed that Ms Pavlovic was licensed when in fact he had previously bought and sold vehicles through licensed motor car traders and had noticed that they displayed on their documentation a licensed motor car trader number. In fact Ms Pavlovic's documents or YVB's documents displayed no such number. Mr Lombardi stated that I should take into account that Mr Rogulic was born in Germany, that he had been in this country only since 1995 and that he did not know the ways of the country and that in Germany brokers and motor car traders were one and the same. I find this submission difficult to accept. Mr Rogulic had in fact dealt in motor cars by buying and selling the same on several occasions between 1995 and 2008. On each of those occasions, he had dealt with motor car traders save and except for the one occasion that I have already referred to relating to his wife's BMW when he sold that vehicle privately. Also, obviously prior to the vehicle being sold, that is the S320, Mr Rogulic did a search of "Carsales.com". He there found the applicant's vehicle advertised by Ms Pavlovic but not in the motor car trader section of the website but in the private section. The fact that it was in the private section of the website rather than the motor car trader section of the website should have immediately set off "alarm bells" and it would have set off "alarm bells" had Mr Rogulic believed that Ms Pavlovic or YVB was a licensed motor car trader. It apparently did not. At that time, the applicant may have been able to retrieve the vehicle. Thus, I conclude that the applicant, through Mr Rogulic, did not actually hold a belief that YVB or Ms Pavlovic was a licensed motor car trader.
The next question that I must decide is that if Mr Rogulic on behalf of the applicant did hold a belief that YVB and/or Mrs Pavlovic was a licensed motor car trader, would such a belief have been reasonable. I do not need to discuss this because I found the applicant through Mr Rogulic did not hold such a belief but in case I am wrong, I think it is reasonable that I should make some findings in relation to whether or not the applicant, through Mr Rogulic, had a reasonable belief that Ms Pavlovic was a licensed motor car trader. I find it difficult to understand how anyone who had received a series of bank cheques that "bounced" at various times could think that a person would be reputable or they would be likely to be a licensed motor car trader. Mr Lombardi correctly said that there are a number of licensed motor car traders that other people would not think are reputable. I agree with that. But I would be surprised that there would be many licensed motor car traders that would give a series of cheques drawn on their own account where there were no funds in the accounts to meet those cheques. That would be something that that respondent would be very interested in if such a thing was to happen and would be likely to take some action. I also think it is most peculiar that Mr Rogulic did not think there was something strange in no documents being given to him in relation to the S320. A document although not mentioning any licensed motor car trader number was given in relation to the C180 but no such document was given in relation to the S320. Mr Rogulic stated in his evidence that in previous dealings he had been given documents to sign relating to trading in motor cars and they had licensed motor car trader numbers on them. In this case, not only was he not given any documents but he did not have a document with a licensed motor car trader number. Also, I find it difficult to accept that a person entering a building in Queens Road, like Mr Rogulic described, would think that a licensed motor car trader would be operating from an office of that nature. Most motor car traders operate from either a showroom which is usually on the ground floor of a building - the high class ones and/or new car sales or from an open yard displaying clear signs about their business and with a small shed at the back. It is fairly common knowledge in this country that operators of those yards always display signs saying that they are motor car traders and giving their name and usually their motor car trader number. In this particular instance, there was no sign whatsoever on the Queens Road property save and except for the one inside the office.
As I have previously said, at the time of the internet search the applicant should reasonably have known that the advertisement on "carsales.com" was in the private section and not the motor car trader section. In an interesting series of questions by me to Mr Rogulic, he said that initially the first he knew that there was a licensed motor car trading system in Victoria was when he sought legal advice. After pursuing Mr Rogulic about that answer for some time, he then said he previously knew that there was a motor car trader system and there were LMCT numbers and those numbers had appeared on his previous documentation relating to other cars he had previously sold. As I have previously said that should have put him on notice. Thus I find that the applicant through Mr Rogulic did not hold a belief that Ms Pavlovic and/or YVB was a licensed motor car trader, and that belief was not held reasonably.
Mr Lombardi said that there should be both an objective and subjective test and in determining whether the reasonable belief exists or not, and I should take into account the fact that Mr Rogulic only arrived in this country in 1995. Even allowing for that, taking into account his experience in selling and purchasing motor vehicles, I do not think that is a very weighty point at all. I have my doubts that the test is objective, however if I am wrong about that in my view, the applicant should objectively have known that Ms Pavlovic or YVB were not licensed motor car traders.
I have been addressed at some length in relation to s 77(3A). That section does in my view present some considerable problems. If the applicant had been able to show that he believed that YVB or Ms Pavlovic were motor car traders and it reasonably held that belief, then it was submitted by Mr Young, counsel for the respondent, that the claim should be reduced by an amount of the actual claim ($40,000) because of s 77(3A). Mr Lombardi on the other hand stated the amount of loss which the applicant suffered ($75,000) should be the figure that is reduced as a result of s 77(3A).
I have looked at that section and have come to the conclusion that the words in the introductory part of 77(3A), that is, "determining a claim" refer to the amount that can be claimed not the amount of the loss. The word "claim" appears to be used purposely rather than the word "loss". I note from Regulation 25 of the 2008 Motor Car Regulations that the highest amount that can be claimed in a proceeding such as this is $40,000, ie the prescribed amount, that is the sum claimed in this proceeding. So if there were to be a reduction, it would be a percentage reduction of $40,000, not of the value of the motor vehicle or the loss involved, unless of course the vehicle was worth less than $40,000 or the loss was less than that amount.
I have concluded that that section would in this particular instance, bearing in mind the applicant's conduct deprive it of any claim whatsoever. The applicant through Mr Rogulic behaved in such a way that it would have been unbelievable for most people to think that after having had such difficulty in obtaining money for one car he had sold and still not having obtained the full amount, that he gave Ms Pavlovic or her business a further and more expensive car to sell. I cannot but wonder why he would have done such a thing. Under those circumstances, I will affirm the decision of the respondent.

At a glance

Court

Decision date

Source

Judgment (21 paragraphs)

Optima Heating & Airconditioning PL v MCTCC (General) [2010] VCAT 2010 (10 December 2010)

Parties

Legislation Cited (1)