Trajkovski v R K Findlay Pty Ltd [2008] NSWSC 273 | Case summary

Trajkovski v R K Findlay Pty Ltd [2008] NSWSC 273 | Case summary | Zoe

JUDGMENT 1 HIS HONOUR: By his first amended statement of claim filed 14 February 2002, the plaintiff sues the defendants for damages. The plaintiff claims in contract and in tort. 2 The plaintiff alleges that, by an agreement in writing dated 26 October 1994 made between the plaintiff and the first defendant, the first defendant agreed to provide certain technical information and services to the plaintiff. The technical information and services are said to be set out in paragraphs 1 to 4 inclusive of the agreement and relate to 1975 to 1989 series Porsche 911 motor vehicles. Alternatively, the plaintiff alleges that the same agreement obliged the second defendant to perform the first defendant's obligations arising under the contract. 3 The plaintiff alleges that in purported performance of the agreement, the defendants, on about 24 November 1994, lodged with the Federal Office of Road Safety ("FORS") an application for Compliance Plate Approval in respect of such vehicles. The plaintiff alleges further that the defendants were, or should have been, aware in October 1994 and at all material times thereafter that certain additional requirements for the issue of Compliance Plate Approval for these vehicles would become operative after 30 June 1995. In particular, so the plaintiff alleges, the defendants knew or should have known of the fact that if Compliance Plate Approval in respect of 1975 to 1989 series Porsche 911 motor vehicles was not issued by that date, such vehicles would be required to comply with what was, in effect, a more onerous Australian Design Rule, being ADR 69/00 on and from 1 January 1996. Central to the plaintiff's allegations in this respect is that the defendants knew or should have known of the fact that 1975 to 1989 series Porsche 911 motor vehicles would not comply with ADR 69/00. 4 It is the plaintiff's case that the defendants, in October 1994 and at all material times thereafter, were aware of the fact the plaintiff's purpose for obtaining such approval was to affix a compliance plate to certain 1975 to 1989 series Porsche 911 motor vehicles which he proposed to import and to sell at a profit. 5 The plaintiff alleges that in breach of the agreement and in breach of an express guarantee contained in it, the application prepared by the defendants was deficient and inadequate for the purpose for which it was lodged and continued to be deficient and inadequate up to and including 30 June 1995 and beyond. 6 In answer to the claim in contract the defendants say that any obligations under the agreement were to be performed by the second defendant and others employed by the first defendant. All other matters are admitted, with the exception of the allegations of breach of contract. The defendants deny that there were any deficiencies or inadequacies and say that any outstanding requirements were caused, inter alia, by the plaintiff's failure to provide requisite test vehicles and parts. 7 The claim in negligence mirrors the claim in contract. The plaintiff alleges that the defendants were subject to a contractual obligation to exercise reasonable care and skill in the making of the application and in advising the plaintiff about it. The plaintiff alleges that, in breach of the duty of care owed by the plaintiff to the defendants, the defendants failed to draft the relevant application with necessary and sufficient technical data to achieve its purpose, failed to advise the plaintiff of the deficiencies in the application and how to address them and failed to overcome the deficiencies in the application in a timely way or indeed at all. The plaintiff's claim in negligence is denied. 8 The plaintiff also alleges a total failure of consideration. 9 In their defence to the first amended statement of claim filed 4 June 2002, the defendants raise a series of matters in answer to the whole of the first amended statement of claim. For the reason that the terms of the written contract lie at the heart of the plaintiff's case, and to the defendants' responses to it, it is convenient to refer to the terms of the agreement in detail before turning to those responses. The contract 10 The agreement is dated 26 October 1994. It is relevantly in the following form:-

(j) Changing the scope of the Porsche models covered by the application from 1975-1989 to 1979-1989 and to 1987-1989. 13 The defendants say further that even if the plaintiff had obtained the subject Compliance Plate Approval, he had no agreement or source of supply for the vehicles he alleges he would have imported. The defendants also say that if the subject Compliance Plate Approval had been granted, it would only have entitled the plaintiff to import complete vehicles and convert them from left-hand drive to right-hand drive in order to meet registration requirements but would not have entitled him to import vehicles and parts and thereafter to assemble them. 14 The defendants then say that the plaintiff's proposed importation of vehicles involved the illegal purpose of evading the special duty of $12,000 collected by the Australian Customs Service under the authority of the Customs Tariff Act 1987 which applied after 1 July 1992 to each used or second-hand vehicle imported into Australia in high-volume and that the plaintiff is thereby not entitled to any damages at all. Alternatively, the defendants say that if the plaintiff is entitled to recover damages, then such damages should be calculated by including a cost of $12,000 per vehicle referable to the said special duty. Finally, the defendants say that if the plaintiff is entitled to recover damages, such damages are limited to vehicles imported pursuant to a Compliance Plate Approval prior to 1 January 1996, since all vehicles imported or on or after that date were required to comply with ADR 69/00. The plaintiff's case 15 In October 1994 Mr Trajkovski was the proprietor of a business known as Diamond Car Repairs at 635 Princes Highway, Kogarah ("the business"). The business was established in about 1989 and was involved primarily in the overhaul and servicing of Porsche motor vehicles for private customers. Mr Trajkovski said that through the business he was also involved in the conversion from left to right-hand drive of vehicles that had been imported into the country by private owners. He said that the importation, sale and conversion of Porsche motor vehicles were the primary source of income generated by the business. 16 As a result of legislation that came into force in 1989, Mr Trajkovski said that there was a limit on the number of Porsche motor vehicles that could be imported into the country by any one person. In 1994 the repair and conversion work to Porsche motor vehicles carried out by the business began to decline. 17 Mr Trajkovski gave evidence of why, in his opinion, this occurred. Specifically, according to him, the Motor Vehicles Standards Act required all vehicles to comply with the Australian Design Rules ("ADR") when first sold in Australia. In order to demonstrate compliance with the ADR, manufacturers are required to conduct tests and to provide evidence based on those tests to the Federal Office of Road Safety ("FORS"). Mr Trajkovski said that typically suitably qualified consulting engineers who submit an application to FORS on behalf of the applicant manufacturer conduct such tests. 18 The evidence that is provided is checked by FORS prior to the issue of a Compliance Plate Approval ("CPA"). A CPA allows the manufacturer to fit compliance plates to vehicles. Compliance plates indicate to vehicle buyers and motor registering authorities that vehicles comply with all relevant ADRs. 19 It was Mr Trajkovski's evidence that he intended to obtain CPA for Porsche 911 vehicles for models between 1975 and 1989 in order that he could import and sell them to the general public at a profit. He said that having CPA in relation to these Porsches would also allow him to be registered and authorised by FORS to inspect and fit compliance plates to Porsches brought into the country by private owners. 20 It should be noted that in a subsequent affidavit sworn 17 November 2005 Mr Trajkovski referred to par 8 of his first affidavit where he indicated that it had been his intention to obtain CPA for Porsche 911 vehicles for the year models 1975 to 1989. In his subsequent affidavit, however, he said that although the agreement with the defendants provided that they were to obtain CPA for those year models, it had always been his intention to restrict the importation of these Porsches to models manufactured between 1986 and 1989. Mr Trajkovski said that the reason he intended to limit the importation and sale in this way was that in around 1994 and 1995 the 1975 to 1985 models were less profitable than the 1986 to 1989 models. The question and significance of whether or not this intention was ever communicated to the defendants is discussed in more detail below. 21 Mr Trajkovski said that in an application for compliance plate approval the applicant is required to nominate the relevant manufacturer category. According to him, the relevant categories are "Full Volume" (over 100 vehicles per year), "Low Volume" (26 to 100 vehicles per year) and "Low Volume" (up to 25 vehicles per year). 22 In order to facilitate the manufacture, conversion and sale of Porsches, Mr Trajkovski said that he applied to Rockdale Council for approval to build a suitable warehouse on land owned by his father. He said that part of this land, known as 8 Schofield Avenue, Kogarah was already being used as a panel beating shop. He said that the approval extended to the manufacture and conversion of Porsches. 23 Mr Trajkovski said that the new factory was to be located on the Princes Highway at Kogarah and consisted of a glass showroom with a factory, offices on the mezzanine levels, spray booths and all the equipment necessary to undertake a full volume conversion of Porsche motor vehicles. 24 Mr Trajkovski gave evidence that, in addition to his own funds, he also had financial backing in relation to the proposed importation and sale of Porsches from Tim Gatland and Peter George. He met Tim Gatland in November 1993 when he was employed by Consolidated Capital Acceptances Pty Ltd. Tim Gatland was in partnership with Peter George. It appears that Mr Gatland is now dead. Mr George gave evidence before me. 25 Sometime in or around mid-1994 Mr Trajkovski met the second defendant ("Mr Findlay"). He was introduced to Mr Findlay by Gary McDonald, who worked for American European Conversions ("AEC") and who was what Mr Trajkovski described as "a Porsche compliance holder". That meant, according to him, that Mr McDonald held CPA for low-volume production of Porsche 930 vehicles. Mr McDonald recommended Mr Findlay as a suitably qualified engineer to perform the necessary tests to achieve CPA for the Porsches. 26 Mr Trajkovski said that he had the following conversation with Mr Findlay at the Keg Hotel in October 1994: - "RF: As it happens I have actually conducted all the relevant tests and draft reports necessary to get approval for that model 911 Porsche. I can draft an application for you to FORS. I will need $15,000 to complete and forward the application.

We would appreciate your earliest attention to this, at your earliest convenience and if you have any further queries, please do not hesitate to contact the undersigned." 31 Mr Trajkovski said he was anxious that the application be processed as soon as possible. Accordingly, he flew to Canberra personally with the application and covering letter within one or two days of meeting with Mr Findlay. He said he personally delivered the application to FORS sometime in late November 1994. 32 Mr Trajkovski gave evidence that after he dropped off the application to FORS he had various conversations with Mr Findlay in relation to the processing of the application. Over the next two to three months he said Mr Findlay would give him feedback in relation to the application. Typically, Mr Findlay would tell him that there had been some delay or that FORS was asking him for further information and material. 33 The application had not been approved by 16 February 1995. On that day a meeting was held attended by Mr Trajkovski, Mr Finianos, Ms Bebek, and Messrs Goonewardene and Mackay. The minutes of that meeting are in evidence before me. There is no dispute that they are an accurate record of what took place. It is convenient to record some portions of those minutes at this stage. 34 The minutes record that the meeting was to have been held on 14 February 1995 in Sydney at Mr Trajkovski's premises where the vehicles were intended to be "manufactured". However, as FORS was advised that the building was still under construction, and that there was no equipment available for observation, the meeting was held in Canberra. 35 According to the minutes, Mr Trajkovski had been requested, on 10 February 1995, to bring "ALL" the information available to support the testing already conducted for CPA and proposed arrangements for ensuring Conformity of Production ("COP") for the vehicle model and its variants for the model years for which compliance was sought. That information was to include complete test reports, drawings, test procedures, vehicle specifications and any other relevant information available. The minutes note that Mr Findlay, described as Mr Trajkovski's "engineering consultant", had contacted FORS to seek clarification of the information requested and had been similarly advised. 36 The minutes also record that it was clear from the outset that most of the documents relating to the ADR tests conducted had not been brought to the meeting. Apparently, however, as Mr Trajkovski and others had travelled from Sydney for the meeting, it was decided to continue discussions using the material that was available. 37 Under the heading "Access to ADRs and Test Documents", the minutes record that Mr Trajkovski advised that he did not subscribe to the ADRs but relied instead on his engineering consultant to provide the technical input for CPA purposes. The minutes record that he was unaware of the Administrator's procedures for CPA, particularly those relating to the period to be allowed for examining evidence submitted for CPA. The minutes note that Mr Trajkovski "then made arrangements to subscribe to the ADRs and obtain a copy of the COP and TFI manuals". 38 The penultimate paragraph on the first page of the minutes is as follows:- "In regard to the test documents it was clear that [Mr Trajkovski] was not able to access the test documents as all the documents were not made available for the meeting although advance notice had been provided to him and his engineering consultant neither of whom had indicated any difficulty in providing this documentation." 39 The minutes go on to record that Mr Trajkovski was made aware that as the CPA holder he would be responsible for compliance of the vehicles to which he fixed compliance plates and as such he needed to have arrangements in place to ensure that his responsibilities were discharged effectively and that the above instances clearly indicated that such arrangements were not in place. Additionally, in the absence of the full test reports, the Administrator would not have any assurance that the ADR compliance tests had indeed been carried out. Mr Trajkovski advised that many ADR related components on the vehicles were to be replaced by new items. A list was being prepared and a copy would be provided to FORS. Mr Trajkovski was advised that this should include all items mentioned in Circular 0-4-5. (This document is consistently referred to throughout the evidence as a 045 certificate). 40 Under the heading "Test evidence requirements", the minutes record that Mr Trajkovski advised that his application was to be amended to cover model years 1979-89 only and that he would formally advise FORS of this. The minutes then proceed to record that he was advised (although I find that this would include Mr Finianos and Ms Bebek) of the need for the following: - o To document clearly the specification of the vehicle variants to be covered by the application, particularly in relation to ADR related components.

o To ensure that these procedures addressed all relevant requirements in the ADRs and Circulars. 41 Then under the heading "Test evidence of ADR compliance", the minutes record that Mr Trajkovski was advised that both he and his engineering consultant had been advised in writing of various deficiencies in the SER evidence submitted to that time and that responses to these were a pre-requisite to obtaining a CPA. The full test reports used as the basis of the SERs were reviewed to assess if they provided adequate assurance that first the vehicle or components tested complied with the ADRs and that secondly the information contained enabled production vehicles to be built to the same specification. In this regard the minutes thereafter record significant inadequacies or absences of information in respect of 36 itemised ADRs. See, in this respect, pages 3 to 5 inclusive of the minutes set out at pages 103-105 of Exhibit PT1 to Mr Trajkovski's affidavit sworn 4 September 2003. 42 Next, under the heading "Compliance with ADR 69/00", the minutes record that the need to comply with that ADR for "New" model vehicles manufactured or after 1 July 1995 was "clarified". Apparently Mr Trajkovski was advised that if he was unable to obtain a CPA and fit a compliance plate to at least one vehicle prior to this date, then that model would be considered to be a "new" model as defined in the ADR. 43 Finally, under the heading "Quality Manual and Conformity of Production", the minutes address the respects in which the quality manual provided failed to address all aspects of quality assurance in AS 3901. It is sufficient to note that several deficiencies were described. 44 The minutes concluded with the following paragraphs: - "The Manufacturing/Engineering Instructions listed does not address some applicable ADRs e.g. 3/02, 13/00, 25/02, 28/01, 29/00, and ADRs after 37/00. It however refers to ADR 24/04 which has not yet been issued. [Mr Trajkovski] agreed that these instructions did not yet exist and was advised that in their absence the Administrator would have little assurance that production vehicles would comply with the ADRs.

[Mr Trajkovski] was made aware that on the basis of the information available the administrator could not be advised that there was any assurance that the vehicle model complies with the ADRs and that production vehicles would be built to the same specification as the vehicle model for which certification was sought." 45 Mr Trajkovski gave evidence that it was at this meeting that he first became aware of the implementation of ADR 69/00. It will be necessary in due course to return to this aspect of his evidence. 46 Mr Trajkovski said that shortly after this meeting he asked Mr Findlay what was going on in relation to his application. He said that Mr Findlay replied in words to the effect that he had all of the reports but could not take them down to Canberra for the meeting. He said: "Leave it to me I'll fix everything up". 47 Mr Trajkovski said that he also discussed with Mr Findlay the need to comply with ADR 69/00. He said that Mr Findlay told him: "Don't worry Petar I will get it through before then. Anyway the new ADR 69/00 compliance doesn't affect you". 48 According to Mr Trajkovski, it became apparent after the meeting in Canberra that a number of additional testing procedures needed to be carried out by the defendants. The requirement for the additional testing came about as Mr Findlay was unable to locate the original primary reports forming the basis of the application. 49 Following the meeting, Mr Trajkovski said he left the outstanding matters raised by FORS to be dealt with by Mr Findlay. However, FORS sent to Mr Trajkovski copies of various correspondence that had already been sent directly to the first defendant, in relation to deficiencies in the application. As late as July 1995, according to Mr Trajkovski, Mr Findlay was continuing to give him assurances that he was attending to all of the outstanding matters raised by FORS at the meeting. 50 On about 1 August 1995 Mr Trajkovski received a facsimile from FORS outlining numerous matters which still needed to be attended to in order to obtain compliance plate approval. Part of that facsimile is in the following terms: - "Appreciate your concern on the status of your application and the resolution of the outstanding queries. However to be fully informed on the position of your application, you need to be fully aware of the details on ALL submissions and responses submitted to this office on your behalf. As discussed, it would assist if all submissions and response replies are transmitted by your office and NOT by your agent on your behalf.

Finally, let me assure you that FORS will deal with your application in a thoroughly professional matter. As you know, progressing your application is dependent on your organisation providing the evidence necessary and ensuring that that information is complete and accurate." 52 Mr Trajkovski gave evidence that shortly before November 1995, he had a conversation with Mr Findlay in the course of which Mr Findlay said to him: "Petar, I'm almost there with getting compliance plate approval from FORS. You can now start importing cars." Mr Trajkovski replied: "Are you sure Russell?" Mr Findlay is said to have replied: "Yes. By the time you get the cars here I'll have the approval through". 53 Mr Trajkovski said that further meetings were held in Canberra with representatives from FORS. One such meeting took place on 12 October 1995. Following that meeting he received a facsimile from Lawrence Glynn on about 3 November 1995 which, in Mr Trajkovski's words, confirmed "the state of affairs in relation to the application for compliance plate approval". My reading of that document indicates that in November 1995 a considerable amount of material and information was still required by FORS before Mr Trajkovski's application would be approved. 54 At par 49 of his affidavit Mr Trajkovski said that in around November 1995, "on the promise of obtaining compliance plate approval I imported ten Porsches (in parts) to be assembled and fitted with compliance plates pending approval from FORS." He was able to produce a bill of lading relating to four only of these Porsches. The document described the vehicles as "body shells". The cost of the vehicles is not given. Mr Trajkovski said that he was unable to locate any other bill of lading itemising the remaining (presumably six) vehicles. There is no evidence of the cost of these vehicles either. 55 Although Mr Trajkovski said that he imported these vehicles in reliance upon the promise referred to in the preceding paragraph, he said at par 50 of his affidavit that he limited himself to bringing in 10 Porsches "as approval was not yet in place". As will be apparent, there is some tension between these two notions, an issue to which it will be necessary in due course to return. In any event, Mr Trajkovski went on to say that he could have imported in excess of 40 Porsches in parts at one time. He said that assuming CPA were obtained for them, and a compliance plate fitted prior to what he described as "the relevant time", the Porsches could have been sold at any time. 56 At par 51 of his affidavit Mr Trajkovski said that the 10 Porsches that he imported into the country in November 1995 "were by and large imported in parts". His evidence at par 49 was to the effect that they were imported completely in parts. The photographs exhibited at page 126 of "PT1" rather confirm this. Similarly, he said at par 52 of his affidavit that he "imported the vehicles as spare parts as opposed to a complete motor vehicle". This had tariff advantages for him. 57 Mr Trajkovski gave further and more detailed evidence of this at par 55 of his affidavit. He said that in order to import the Porsches, he would fly to the United States and arrange for the purchase "of vehicle parts in which [he] was interested". He said that these Porsches would typically be cars that had been recovered by insurers or finance companies or damaged in some way. Often the car parts that he purchased would simply consist of a shell and an engine. Those vehicles would then be disassembled and imported into Australia in parts in a container. That was said to be the process that he used to import the 10 Porsches he allegedly imported in November 1995. 58 Mr Trajkovski said that, apart from the trip in November 1995, he returned to the United States on at least three further occasions to buy more Porsches in parts. He said that he did so in reliance upon assurances given to him by Mr Findlay. He has no records of these trips or of the vehicles that he says he purchased. I consider that the absence of such records is significant. I record at this point in these reasons that I am not satisfied that Mr Trajkovski returned to the United States on any further occasions as he suggests or that he did so in reliance upon any assurances said to have been given to him by Mr Findlay. 59 Significantly for the purposes of his case, Mr Trajkovski said that in his estimation, in the event that compliance plate approval were obtained by Mr Findlay in accordance with the agreement, he would have been able to import and sell approximately 40 Porsche 911 motor vehicles up until 1 January 1996 when the universal implementation of ADR 69/00 came into force. He said that the factory at Kogarah had been specifically built and approved by Council in order to assemble and affix the vehicles with compliance plates. In addition, he said that the original Diamond Car Repairs at Schofield Avenue, Kogarah could have been utilised to assemble and convert the cars. He considered that 40 vehicles within the period prior to 1 January 1996 was "a conservative estimate". 60 Mr Trajkovski said at par 56 of his affidavit "over the following 12 month period [he] continued to receive assurances from Russell Findlay that the necessary testing was almost complete". It is not clear to what period of 12 months he is referring in this paragraph. However, he said that on many occasions Mr Findlay would show him photographs of the testing being conducted "to put [his] mind at ease". These photographs did not become evidence. 61 Mr Trajkovski said that on or around 25 November 1995 FORS were provided with details of compliance with ADR 14/02 (the impact test) on the Porsches. This was said to be the last requirement that needed to be met for approval by FORS, apart from ADR 69/00. He said at par 57 of his affidavit, "[c]onditional approval was then given by FORS in accordance with its letter of 5 October 1995 for the manufacture of a maximum of 50 vehicles". In my opinion that sentence, and the sentence "[t]his approval as stated above was conditional on a demonstration of compliance with ADR 69/00 within a reasonable period during the life of the approval" which follows it, misstate what the relevant paragraph of that letter said: see par [51] above. 62 However, Mr Trajkovski cites a letter from FORS dated 27 November 1996 as confirmation of that conditional approval. That letter is from Lindsay Evans, Administrator of Vehicle Standards at FORS, and is in the following terms: - "The fax of 25/11/96 indicates that you have carried out an impact test. This test is considered satisfactory and clears up the issue of compliance with ADR 14/02.

[6]

The condition that compliance with ADR 69/00 be shown within the specified time was fundamental to the issue of the Approval. Counsel has advised that because the condition has not been complied with, Approval No. 10619 has lapsed. Accordingly, Swissnet Pty Ltd has no authority to place identification plates on the vehicles identified in the Approval." The defendants' case 66 Mr Findlay gave evidence. He said that before any passenger vehicle is registered in Australia it must be fitted with an Australian compliance plate. Such plates can only be placed on a motor vehicle by a manufacturer or importer who has obtained prior approval from FORS to affix them. The affixation of an Australian compliance plate denotes that the vehicle complies with ADRs 67 Leaving aside personal imports, there are two kinds of approvals: a Full Volume approval and a Low Volume approval. The former requires the manufacturer or importer to demonstrate compliance with all applicable ADRs by providing a satisfactory test report on a representative vehicle. The latter can be obtained for the importation of a motor vehicle not already sold in Australia under a Full Volume approval. A Low Volume approval is limited to 25 vehicles in a calendar year and involves less stringent requirements. 68 Safety standards vary from country to country. It cannot therefore be assumed that a vehicle manufactured for sale in one country will comply with the safety standards of another. FORS may accept overseas test results on equivalent vehicles when the overseas safety standard is more stringent than the Australian standard. 69 Mr Findlay recalled that he first met Mr Trajkovski in late September or early October 1994 at his premises at 635 Princes Highway, Kogarah following a phone call from him in which he had told Mr Findlay he had been referred by AEC Porsche. Mr Trajkovski told him, "I am interested in obtaining a Full Volume compliance approval for Porsche 911 series vehicles. My business is called Diamond Imports". 70 Mr Findlay said that the Kogarah premises had no signage or identification and comprised a ground floor and first floor. On the ground floor was a workshop with limited facilities for panel beating and painting of motor vehicles. The only vehicle in the workshop at that time was a smashed BMW. There was no staff present during Mr Findlay's visit. On the first floor there was only a lunchroom and that is where they spoke on the first occasion. Mr Findlay said that there was nothing visible to indicate that the premises were a licensed smash repair facility. 71 According to Mr Findlay, Mr Trajkovski said to him, "I want to get Full Volume compliance reports for Porsche 911s so I can compete against Porsche Cars Australia. I understand you've already obtained a Low Volume approval for AEC Porsche for Porsche 930s and you should be able to use a lot of that for my application. I know all about Porsches. I trade as Diamond Smash Repairs but I want the application to go in as Diamond Porsche". 72 Mr Findlay asked, "Where do you plan to assemble and prepare these vehicles?" Mr Trajkovski replied, "I'm going to rebuild this place". Mr Trajkovski asked, "What sort of cost am I looking at?" Mr Findlay replied, "It will cost you $20,000 plus the cost of any further testing that may be required. For example, if you want to change the brake system and fit turbo brakes then that will require a new test at a cost of about $7,500. Also, even if you get your approval, you will sooner or later be required to comply with ADR 69 which requires a crash test". Mr Trajkovski denied that Mr Findlay told him that there would be any further cost for him to compile a successful application to FORS. 73 Mr Findlay gave Mr Trajkovski a document and said, "Have a look at this. This is our standard form of agreement". Approximately two weeks later Mr Trajkovski rang Mr Findlay and they agreed to meet at the restaurant in Beverly Hills for lunch. Mr Trajkovski said, "I want to go ahead. I'm happy to pay the $20,000". They shook hands and left the restaurant. 74 On 26 October 1994 Mr Trajkovski rang Mr Findlay and said, "I have the agreement signed and I've got a cheque for $10,000 for you. Can you come down here and pick it up?" Mr Findlay went to the Kogarah premises, which appeared to him to be in all respects the same as when he first went there. Mr Findlay was introduced to two other men. The four of them went upstairs to the lunchroom and Mr Trajkovski produced a document that he had signed. He said, "I want to sign this". Mr Findlay replied, "Why won't you sign my standard agreement?" Mr Trajkovski replied, "My legal people have prepared this document. Don't worry about the wording". Mr Findlay then signed a document, which he noted was set out as an agreement between Mr Trajkovski and the first defendant. 75 Between 26 October 1994 and 24 November 1994 Mr Findlay met Mr Trajkovski on two other occasions at the Kogarah premises. He thought that it was on the first of these occasions that Mr Trajkovski handed him a copy of a QSD (Quality System Document) and said, "This is a document I have obtained from Frank in Perth who is one of the principals of Taiyo, which is importing standard RX7s from Japan. All I want is the name changed so that I can use this document for my application". Mr Findlay said, "That is all well and good, but the document must represent the facilities and systems in your company, because FORS will conduct an inspection of those facilities before they give any approval". The first defendant then prepared a QSD in accordance with Mr Trajkovski's instructions. Mr Trajkovski then retrieved the QSD that had been provided to him as the source document for the QSD that was submitted to FORS. According to Mr Findlay, Mr Trajkovski signed the original application documents on the second occasion. Mr Trajkovski denied the conversation referred to in this paragraph. He said that because Mr Findlay failed to provide FORS with a properly drafted QSD, he tried to assist the application by giving him one he had obtained from Taiyo. 76 Under cover of a letter from the first defendant dated 24 November 1994, the application was submitted to FORS. It was in the terms set forth above at par [30].

77 Mr Findlay said that he did not prepare the application but that two members of the first defendant's staff prepared it. He signed the documents before they were submitted and sent a copy of the application to Mr Trajkovski the same day. 78 In late November or early December 1994 Mr Findlay had a conversation with Andrew Mackay of FORS, during which he said to Mr Findlay, "We've been requested to only deal with Mr Trajkovski and not to supply you with any information". Exhibit F to Mr Findlay's affidavit is an unaddressed handwritten letter written by Mr Trajkovski that Mr Findlay believed was sent to FORS by Mr Trajkovski. It said that Mr Trajkovski "would like all communications regarding a submission lodged by me personally to the offices FORS regarding . . . all Porsche to be sent to me on my fax or post". Mr Trajkovski admitted writing the letter but denied telling Andrew Mackay or anyone else from FORS in 1994 that FORS were only to deal with Mr Trajkovski or were not to supply information to Mr Findlay. Mr Trajkovski said the handwritten letter was sent to FORS between six and twelve months after he entered into the agreement with the defendants because he was receiving information from FORS that Mr Findlay was not responding to correspondence being sent to FORS regarding the application for compliance plate approval. Mr Trajkovski said that at no time did he approach anyone from FORS or request that they stop dealing with Mr Findlay. 79 On 30 November 1994 Mr Findlay received a fax from FORS to which he responded the same day. On 14 December 1994 FORS sent a fax to Mr Trajkovski. That document was in several pages and, in summary, expressed FORS' dissatisfaction in a number of respects with Mr Trajkovski's application. It is clear from the document that FORS was insisting upon a significant amount of additional evidence before any further consideration to the application could be given. 80 The letter was referred to Mr Findlay. At par 29 of his affidavit sworn 27 January 2004 Mr Findlay refers to that document and deals with it in considerable detail. Upon my reading of that paragraph, however, Mr Findlay is setting out his understanding of the matters to which the letter was directing attention rather that listing or describing anything done by him as a response to the concerns that it raised. It would appear that FORS continued to seek clarification of Mr Trajkovski's application until shortly before the meeting in Canberra on 16 February 1995, to which I have earlier referred. Mr Findlay said that Mr Trajkovski rang him in early February 1995 and said, "I've arranged a meeting with FORS which will be held in Canberra on 16 February. You or Simon should attend". Mr Findlay said that at no stage prior to the date of the meeting had Mr Trajkovski told him that he intended to replace any of the components, which affected the ADRs, with new items. At no stage prior to the date of the meeting had Mr Trajkovski told Mr Findlay that he intended to change his application from 1975-1989 models to 1979-1989 models. 81 Mr Findlay deals with the minutes of this meeting in his affidavit in quite some considerable detail at par 39. It is not an unfair summary of Mr Findlay's response to say that the first defendant conducted most of the tests said in the minutes to be required by the relevant ADRs. 82 On 20 February 1995 FORS sent a facsimile to Mr Trajkovski referring to his visit to Canberra on "15 [sic] February 1995". The terms of that document are as follows:- "Refer your visit to Canberra 15 February 1995. Some notes on problems with the few test reports available and SERs submitted.

Mr Findlay: "FORS is getting really petty. They are knocking back document for misspelling and stuff like that. They don't want to see this thing go through. They accepted the same QSD for another application but for your application they are knocking it back. I think they are just being spiteful. There is nothing wrong with your application ". 90 Mr Findlay said that on the basis of the FORS internal memo from Mr Goonewardene to Mr McLennan and Mr Huntington dated 10 May 1995 and Mr Goonewardene's facsimile to Mr Trajkovski dated 16 June 1995, he believed that Mr Trajkovski met with officers from FORS on 15 May 1995. Mr Findlay was not invited to attend the meeting and as far as he is aware, no employee of the first defendant was in attendance either. 91 Mr Findlay said that throughout the period from November 1994 to 30 June 1995, Mr Finianos handled the day-to-day conduct of Mr Trajkovski's application to FORS. Mr Findlay signed some of the documentation in relation to the original application. 92 In about March 1995 Mr Findlay had taken Mr Trajkovski to the New South Wales RTA's crash lab at Rosebery, where he met with the manager Mr Delnevo, the finance director and Mr Babui, the engineer in charge. On this occasion Mr Delnevo said, "The cost of conducting a crash test is $39,000. On top of that you'll have the cost of the car. Obviously we cannot give any guarantees as to the outcome of that test". According to Mr Findlay, following that meeting Mr Trajkovski said to Mr him, "I will not be doing any crash tests here in Australia". Mr Trajkovski denied saying this. 93 Shortly before 29 August 1995 Mr Trajkovski rang Mr Findlay and said, "I want you to come to a meeting with FORS at my place next Tuesday. Please don't bring any copies of the submissions or test reports with you, as I'm going to set these two up". Mr Findlay said that he understood from the use of those words that Mr Trajkovski was intending to dispute statements made by FORS in relation to documents previously submitted by Mr Trajkovski or by the first defendant on his behalf. Mr Trajkovski denied saying this. 94 On 29 August 1995 Mr Findlay went to a meeting with officers from FORS at the invitation of Mr Trajkovski, held Mr Trajkovski's premises at Kogarah. Lawrence Glynn and Doug Rann from FORS were present, together with Mr Trajkovski and Mr Findlay. On this occasion there was only one complete Porsche vehicle present at the premises, being a blue Porsche 911 which Mr Findlay had previously seen there and which Mr Trajkovski had been driving. However, on this occasion, the NSW registration plates had been removed and during the course of the meeting Mr Findlay saw that the compliance plates had also been removed. The only other Porsche vehicle present on that occasion was a Porsche 911 body shell without doors that Mr Findlay had seen at the premises being panel beaten on previous visits. 95 Lawrence Glynn brought a number of SE (summary evidence) documents with him to the meeting. He went to each of these documents and said, "Where's the supporting documents and test results for this one?" Mr Trajkovski was unable to provide any documents in response to any of Mr Glynn's requests. Mr Findlay said that he was unable to assist as he had been instructed not to take any documentation to the meeting. 96 Mr Findlay said that as far as he knew that was the first time that anyone from FORS had inspected Mr Trajkovski's facilities. While they were there Mr Glynn and Mr Rann casually inspected the blue Porsche at the premises, lifting the bonnet and the boot lid. When the bonnet was lifted Mr Findlay observed four holes in the firewall indicating to him that the compliance plate had been removed. Mr Findlay said that during the course of the inspection Mr Trajkovski said, "This is a vehicle which I have converted". Mr Trajkovski denied saying this. 97 Mr Findlay said that in August 1995, apart from AEC Porsche (who had Low Volume approval for Porsche 930 vehicles), and another company that had obtained a Low Volume approval for Porsche 930 vehicles, all of the Porsche vehicles imported into Australia, that had compliance plate approval, were imported by Porsche Cars Australia. 98 Mr Findlay never saw Mr Trajkovski supply a test vehicle that complied with his specifications, which could have been used as an ADR test vehicle. The blue Porsche referred to was not standard in that it did not have any heater - demister unit and the exhaust system was also non-standard. 99 Mr Findlay said that he was aware of the intended introduction of ADR 69 prior to 1 July 1995 when it became applicable to "new" vehicles, meaning a new model introduced into Australia. It was his understanding that ADR 69 became applicable to all MA category (i.e. passenger) motor vehicles sold in Australia on or after 1 January 1996. Matters of agreement 100 An analysis of the pleadings, and of the way in which the case was conducted before me, reveals the following significant matters are not in dispute:- 100.1 Mr Findlay was at all material times a professional engineer holding himself out as having expertise in matters of compliance with the Australian Design Rules promulgated under the Motor Vehicle Standards Act 1989 in matters of making applications to FORS for compliance plate approval.

[656] There is abundant authority that "court should be astute to adopt a construction which will preserve the validity of the contract", per Mason J, Meehan v Jones (1982) 149 CLR 571 at 529 Biotechnology Australia Pty Ltd v Pace (1988) 15 NSWLR 130 at 132, per Kirby P. Further the court will strive in dealing with a commercial contract to discern the objective intent of the business relationship or other parameters of such contract in order to give effect to that which the parties may be seen to have bargained for. But always it is to the words of the contract that the court must attend looking in that regard to the whole of the contract to discern the parties' intent. Where mechanical provisions intended to operate over an extended period of time are concerned the court endeavours to follow the mechanics and provisions expressed in the contract in the endeavour to follow, always by looking at the manner in which the matter is expressed, how the parties saw the contract as a working guide to the way forward. As pointed out in Biotechnology at 135, the court will however not be in a position to in effect spell out that which the parties have for themselves failed to agree upon. Nor will court be no position to clarify that which is irremediably obscure. Nor will court accept for itself a discretion which the parties have, by their agreement, reserved to one or other of them. To do so would not be to give effect to the contract but to change it: Kofi-Sunkersette Obu v A Strauss & Co Ltd [1951] AC 243 at 250 (PC)." 105 Mr Trajkovski submitted that cl 1 of the agreement obliged the first defendant to prepare the "submission" or application for approval, and to furnish all necessary specifications and technical data. Having regard to the words in the first part of cl 3 of the agreement, the issue became whether or not the application and the supporting and accompanying test results, at the time they were lodged with FORS, were in and of themselves, and without the need for any subsequent modification or supplementation, sufficient to satisfy FORS to grant a CPA. If they were not, there was a breach of the agreement by the first defendant. 106 In that regard the word "guarantees" in cl 3 should be given its ordinary common sense meaning. The context in which that word is used clearly does not give rise to a construction in the usual legal sense of the word "guarantee": that is, a promise to answer for a debt, default or miscarriage of another. The usual and ordinary meaning given to the word "guarantee" which should be adopted in the context of the agreement includes a promise or assurance, especially one in writing, that something is of specified quality, content, benefit, etc., or that it will perform satisfactorily for a given length of time, something that assures a particular outcome or condition or a formal promise or assurance, especially that something is of a specified quality and durability.

(e) Each manufacturer, when making first application for CPA is required to supply the Administrator with a written description of the quality assurance arrangements as outlined in circular 0-13-1". Note: the scale of the manufacturer's operation will determine the extent of documentation required." 108 According to Mr Trajkovski's submission, therefore, the obligation to furnish details of the quality assurance arrangements to FORS was clearly included in the scope of the first defendant's obligations under cll 1 and 3 of the agreement. This is further evident from the wording of the second part of cl 3 of the agreement which extends the defendants' guarantee to include a promise that vehicles "converted and modified" subsequent to any CPA will meet the "specifications" and be acceptable to FORS. Mr Trajkovski submitted that the only sensible way in which the defendants could satisfy this obligation would be to draft a document designed to ensure that the Porsches manufactured by him (after CPA) in fact complied with FORS' requirements. Such a document is, in the context of the evidence, one that would satisfy the quality assurance arrangements (that is a QSD). Mr Trajkovski submitted that compliance by the defendants with their respective obligations in contract and in tort required the preparation for submission of a "flawless" application. 109 Mr Trajkovski also emphasised that the subject of the agreement was "Porsche 911 vehicles from 1975 to 1989". According to his submission, any attempt by the defendants to narrow the scope of the agreement to only such of those vehicles as may have been originally imported into Australia as whole vehicles, converted from left to right-hand drive and then reassembled in Australia, is without contractual justification. The case put by the defendants inappropriately suggests a proviso requiring the contract to read "Porsche 911 vehicles from 1975 to 1989, but only to the extent that they were brought in Australia as whole cars, before undergoing a conversion process from left to right-hand drive". 110 In any event, according to Mr Trajkovski, the construction proposed by the defendants is wrong as a matter of common sense; the approval sought by Mr Trajkovski in the application was with respect to a certain make and model of vehicle, being Porsche 911 vehicles from 1975 to 1989. The manner in which Mr Trajkovski intended to take advantage of the CPA, once granted could not as a matter of logic affect the process by which the defendants were to obtain approval in relation to those particular models. 111 Further, the second part of cl 3 of the agreement does not assist the defendants. The phrase "and that vehicles converted and modified by Diamond Car Repairs will meet those specifications and be acceptable to the Federal Office of Road Safety subject to the normal audit requirements", properly analysed, does no more than indicate that as a consequence of the approval (the first part of the clause) vehicles subsequently converted or modified by Mr Trajkovski (whatever their origin before or after conversion or modification) would meet the requirements for approval and therefore be acceptable to FORS. 112 The "audit" referred to in the agreement is dealt with by Mr Chrisis. The effect of his largely unchallenged evidence is that an audit conducted by FORS is a random check of a manufacturer's facility that occurs (if at all) after the granting of CPA. In light of this the only sensible construction to be given to this part of the agreement is that the defendants were obliged to ensure that any vehicles assembled and manufactured by Mr Trajkovski (after CPA was obtained) would be acceptable to FORS in the event of an audit. Significantly, this obligation only falls upon the defendants at a time after the granting of CPA. 113 The second part of cl 3 refers to "vehicles" rather than "the vehicles", suggesting that the two parts of the clause are not necessarily referring to the same vehicles. This can be demonstrated by asking what is meant to be the subject of the approval. The answer is a completed car that meets the requirements of the ADRs that are applicable to it immediately before a compliance plate is affixed to it. In those circumstances, while the focus is then on a car that is fully assembled, it is not necessary to consider the obvious fact that at an earlier time (whether in Australia, America or at the factory in Germany) the car was in an unassembled, or partly assembled, state, or that there was no car because of the fact that all there was were parts, which when assembled, would constitute a car. 114 In other words, Mr Trajkovski wanted approval for fully assembled vehicles that, once assembled, would satisfy ADRs; he did not merely seek approval for certain parts that may be contained in them. The focus was on whether complete vehicles were roadworthy. The defendants' submissions 115 The defendants did not directly address Mr Trajkovski's analysis of the construction of the contract. Mr Trajkovski's case was that the defendants were required to prepare a submission that would ensure or guarantee, in the sense discussed, full volume compliance plate approval for Porsche 911 vehicles in the specified years. It is not in dispute that this did not occur. Rather than take issue with Mr Trajkovski's contentions about what the contract obliged the defendants to do in fact, the defendants argued that a series of unilateral acts on his part made practical performance of the contract by the first defendant impossible. Those matters were as follows:- (a) The uncertain variation in model years;

Q. . . .There is not a hint in paragraph 8 of any suggestion of limiting the years in which you were interested? A. No but if I am overseas and I am buying 86 to 89 model cars and a 79 or 83 which is really, really cheap comes up, I will buy it and I was not limited only to 86 and 79 [sic 89]. I had the option again to buy an early car, not that I was really interested in the early car but I had the option there." 118 According to the defendants, this is in effect a third version of Mr Trajkovski's plan. It takes no account of any of the practicalities of approval that were explored at length with Mr Chrissis and Mr Enkelman. It fails to recognise that to keep this option open would involve a full-blown appraisal of the years 1979 to 1986. The defendants submitted that to the extent that Mr Trajkovski varied the terms of the contract to change the relevant model years covered by the approval, the terms of the agreement cannot be ascertained with certainty, thus rendering it unenforceable. 119 With respect to the second matter, the defendants submitted that Mr Trajkovski sought to have, and largely succeeded in having, them removed from the consultation process with FORS. This prevented the defendants from doing that which they had been asked to do: see par [78] above. According to the defendants, the step taken by Mr Trajkovski "to remove them from the loop" unilaterally made performance of the agreement by the defendants practically impossible within the many authorities such as Australis Media Holdings Pty Ltd v Telstra Corporation Ltd (1998) 43 NSWLR 104. The defendants argued that the letter referred to at par [78] above, which Mr Trajkovski admitted having written, countermanded the agency created by the agreement and prevented the defendants from performing some of the obligations that it imposed upon them. The defendants pointed to correspondence sent directly by FORS to Mr Trajkovski, which meant that the defendants were, in effect, at his mercy concerning issues raised in such correspondence about the application and its progress. For example, annexure 'M' to Mr Findlay's affidavit is a letter from FORS to Mr Trajkovski which acknowledges "your response" concerning selection of a test vehicle. Mr Trajkovski's response is not in evidence. The defendants contended that Mr Trajkovski had taken over the process of seeking approval and had excluded the defendants from it. 120 Even if Mr Trajkovski had not wholly excluded the defendants in the way suggested, he was failing conspicuously to address concerns drawn directly to his attention by FORS. For example, the defendants point to Mr McLennan's letter in March 1995 to Mr Trajkovski, set out at par [83] above, to which it appears Mr Trajkovski provided no relevant response. The defendants' written submissions on this topic were as follows:- "[39] After this meeting FORS raised with the plaintiff directly what it perceived to be difficulties in his fulfilling his obligations having regard to the manner in which he was proposing to proceed: Annexure Q to the affidavit of RKF. By this time the plaintiff's plan had stepped away from modification to building: it follows that the agreement contended for had ceased to govern the arrangements. In any event this memo shows that the plaintiff was made well aware of the difficulties he faced at the meeting with FORS on 15 February 1995.

[41] So far from cooperating with the defendant or not impeding his own interests the plaintiff never responded to Annexure Q by detailing his proposed manner of responding to the problems identified by FORS. He never developed a plan to assuage FORS concerns and he never told them how his plan met the matters raised by them. Absent some movement on the plaintiff's part to augment the information available to FORS as at March 1995 FORS was telling him that the proposal was attended by too many doubts to be viable so far as approval was concerned." 121 The defendants point to the internal memorandum from Mr Goonewardene dated 10 May 1995, set out at par [84] above, as evidence of Mr Trajkovski's failure to address the concerns expressed by FORS in the letter of March 1995. The author of that letter stated "I am not aware of any information provided in response to this letter addressing the concerns raised in the report or the letter". The defendants emphasise that the author of that document was also apparently so concerned with making sure that Mr Trajkovski understood what FORS perceived to be the difficulties lying ahead of him that it was suggested that the "responsibilities of a full volume CPA holder . . . may need to be reiterated as a matter of form". 122 On 16 June 1995 FORS corresponded directly with Mr Trajkovski about his QSD: see par [86] above. Paragraph 18 of that document refers to "your previous QSD". The defendants emphasise that there is no evidence that they had any input into Mr Trajkovski's second QSD. The defendants submitted that Mr Trajkovski had taken that task upon himself and had bypassed them. Mr Findlay had not been invited to attend a meeting with FORS on 15 May 1995: see par [90] above. 123 The defendants submitted that Mr Trajkovski not only failed to cooperate with them to further the object of securing approval, but that he actively intervened and conducted himself in such a way as to prevent the defendants or either of them from doing what needed to be done to obtain it. The defendants submitted that in those circumstances there was no causal connection between any difficulties suffered by Mr Trajkovski and any failing on their part. 124 With respect to the third matter, the defendants contend that the original agreement related to Mr Trajkovski's proposal to import whole vehicles but that he unilaterally, and impermissibly, changed this to include the importation of vehicles in parts. It was the defendants' case that that was outside the terms of the original agreement, which refers to "vehicles converted and modified by Diamond Car Repairs". 125 Mr Trajkovski was cross-examined about this. His evidence is unsatisfactory and unconvincing. I reject his resort to an imperfect memory as untruthful. Part of that cross-examination is as follows:- "Q. What you were proposing to do was to import parts that might go to make up such a vehicle, do you agree with that? A. No. It was to get an approval for 911 series vehicles to import whatever I wanted to import and whether I wanted to import them in parts or import them as a complete car it was up to me at the end of the day what I wanted to do with it.

Q. There is nowhere in what you relay what happened that day do you say to him I want to bring these cars in as parts? A. This is now 94. I mean, I can't remember what actually happened what was really said that day, the whole context of the fifth the complete meeting." 126 Mr Findlay gave evidence that the first time he heard about the proposal to import vehicles in parts was when these proceedings commenced. There is no evidence that he was given a copy of, or saw, the letter referred to at par [51] above written to Mr Trajkovski by Mr Core on 5 October 1995. 127 The agreement refers to "vehicles converted and modified by Diamond Car Repairs". Nowhere in the agreement is there a definition or explanation of what that conversion or modification would encompass. This is arguably significant because the "guarantee" given by the defendants "that the submission details test results and specifications" would "fully encompass the information required by" FORS was tied to the requirement that vehicles converted and modified would "meet those specifications and be acceptable to" FORS. 128 Mr Trajkovski himself said that building a car from parts would not amount to converting it, as the following question and answer demonstrates:- "Q. Now, you wouldn't describe bringing a car in in separate parts as converting it, would you? A. No." Mr Trajkovski also agreed that putting an engine into the body was not his understanding of modifying a vehicle, as shown by the following question and answer:- "Q. All right. Now, you wouldn't describe putting the engine into the body and fixing the suspension as modifying it either, would you? A. No." 129 Accordingly, the defendants emphasised that Mr Trajkovski's case was that he wanted approval for something other than "vehicles converted and modified". He was seeking approval for the building of cars from parts, which was quite a different undertaking to the one covered by the agreement. Mr Trajkovski's answers quoted above showed that assembling vehicles from parts was a different undertaking to converting and modifying them. I would have formed that view even in the absence of such a concession. 130 The defendants submitted that there are powerful reasons why this amounts to a material difference in concept. The work involved and the variability in what would be required to construct a single model of car, from the parts of cars spanning potentially 14 years, is a vastly different logistical undertaking to importing whole cars and merely changing them from right to left-hand drive. Mr Findlay said he would not have been prepared to get involved in a parts-based scheme. Nor is there anything inherently unlikely or improbable about that position. In the defendants' submission it accords with common sense, based on an appreciation of the wholly different level of difficulty involved. Perhaps more importantly, it accords with common sense in the light of the evidence of both Mr Chrissis and Mr Enkelman concerning the scope of the undertaking necessary to bring a parts importation business plan to fruition. According to the defendants, therefore, it follows that the agreement relied upon ceased to govern the relationship between them and Mr Trajkovski, because it only contemplated the modification and conversion of whole cars and not their construction.

131 The defendants also relied upon a series of further submissions that combined criticism of both Mr Trajkovski's capacity to perform and his willingness to cooperate with them. The first such submission had as its point of focus the construction of what is described as a Single Uniform Type Inspection or SUTI vehicle. 132 The defendants contended that it was Mr Trajkovski's responsibility to produce a vehicle capable of meeting the criteria of a SUTI. Axiomatically, that vehicle had to be available prior to approval and logically prior to submission of the application to FORS. The first defendant did not agree to supply its own vehicles or parts for the purposes of testing or producing a SUTI. The defendants submitted that there was no evidence that Mr Trajkovski had a SUTI even though the minutes of the meeting in Canberra on 16 February 1994 referred to it. According to the defendants, it is clear beyond argument that Mr Trajkovski did not know that he had to produce a SUTI. He gave evidence of using a previously modified vehicle as his SUTI: see discussion below. In that regard the defendants contended that there were a number of practical problems with such a suggestion and that it was clear that in giving evidence Mr Trajkovski was engaging in reconstruction in the sense that it was not something he had ever turned his mind to previously. It follows that Mr Trajkovski was unable to comply with a necessary precondition to performance of his side of the bargain, which was the production of a vehicle capable of fulfilling the role of a SUTI. 133 The defendants' argument was as follows. The vehicles for which approval was to be given necessarily had to be vehicles that Mr Trajkovski could reliably and unfailingly reproduce. There was some failure by him to appreciate this subtlety, but it is common ground among Mr Chrissis, Mr Enkelman and Mr Findlay that the approval process would culminate in the production of a SUTI vehicle with which all subsequent production would have to conform. (Mr Trajkovski's evidence that he would build 50 cars and then submit one to be the SUTI amounts to further evidence of the unlikelihood of his seeing the process through to completion: see par [184] below. It also begs the question of how on any view of the matter he could have done that prior to 1.7.1995). It would be unimaginable that the agreement could be given effect to without the parties cooperating so as to ensure correspondence between what was tested and what was to be included in production.

137 The defendants' next submission drew attention to the requirement that "the submission details test results and specifications" would be met by vehicles converted and modified by Diamond Car Repairs. This cross-reference is said to confirm the interrelationship between what the first defendant had agreed to do and what Mr Trajkovski was to do, and highlighted the implication of the need for cooperation between them. In other words, a theoretically complete set of submission details, test results and specifications bearing no relationship to what Mr Trajkovski intended to produce would be useless. Mr Trajkovski's ability to claim the loss of the benefit of the guarantee could not as a matter of logic arise until the production by him of converted or modified vehicles apparently in accordance with the submission details, test results and specifications. According to this submission, there was no breach of the agreement by the defendants because the time for performance of the guaranteed outcome never arrived. The failure of Mr Trajkovski to produce cars triggering the obligation to ensure compliance thereby severs the connection between any breach of the first limb of cl 3 of the agreement and any loss or damage said to arise from that breach. 138 The defendants submitted that the use of the terms "convert" and "modify" were not reconcilable with what Mr Trajkovski had in mind - that is to say, the construction of whole vehicles from parts imported into the country. In those circumstances the agreement had nothing at all to do with the manner in which Mr Trajkovski claims he intended to exploit any approval that may have been obtained. Because, according to the defendants' submission, the agreement could only be construed as an agreement with respect to whole cars, the defendants only ever made a promise that related to them. Mr Trajkovski wanted specifications and technical data referable to cars to be constructed from parts of uncertain origin. 139 It had been submitted by Mr Trajkovski that the burden imposed upon the defendants was to produce a "flawless" submission. Such a document could not be produced in the abstract. According to the defendants, the evidence establishes that FORS' expectation was that the document would "control" the methods by which the vehicles for which approval had been obtained would be produced so as to correspond with the SUTIs. If the SUTIs were not available or known, and the parts to be replaced were not identifiable, the QSD could not logically be produced. 140 The defendants re-emphasised that Mr Trajkovski was quite unable to supply the vehicles for use as SUTIs. The QA had only to deal with modification and conversion, as opposed to construction, and so would never have covered that which Mr Trajkovski had in mind as his means of production. The defendants submitted that even after years of involvement of an expert on his behalf in the present litigation, and his own appreciation of the issues in the case, Mr Trajkovski was still incapable of showing how he was planning to make his intention of building cars from parts correspond with previously modified vehicles, of which he produced no records and in respect of which he conceded having kept no paperwork capable of identifying the relevant parts. The defendants submitted that it followed that in those circumstances there was no evidence from which the court could conclude that Mr Trajkovski had the means of providing the necessary reference points - namely SUTIs - that would have permitted the preparation of an adequate QA. 141 According to the defendants, the QSD essentially had to show how a vehicle could get from the point of importation to compliance with the relevant SUTI. The characteristics of the SUTI had to be ascertainable in order to map out the course to be taken from importation. In addition, each variation in the imported vehicles had to be accounted for so as to ensure that by the time it reached completion, that variation had come to comply with the SUTI. 142 In response to Mr Trajkovski's submission that there was no contractual justification for narrowing the scope of vehicles under construction to "whole vehicles", the defendants said that the words "convert" and "modified" did not admit of the construction of a vehicle from parts. Their ordinary meaning, in context, envisaged whole vehicles that were either modified or converted. To speak of car parts that are converted into a vehicle, or modified into a vehicle, is to do injustice to the natural and ordinary use of the words. As indicated above, even Mr Trajkovski appears to accept that proposition, although it was submitted on his behalf that that evidence should be disregarded. 143 With respect to Mr Trajkovski's submission that the manner in which he intended to take advantage of the CPA once granted could not as a matter of logic affect the process by which the defendants were to obtain approval in relation to particular models, the defendants submitted that it paid no regard to the need to present a SUTI or SUTIs or the need to have a repeatable process delineated in the QSD so as to ensure the production of vehicles that corresponded with that for which approval had been given. The QSD was central to approval and it could not be generated without knowing how one got from the imported vehicle to the finished vehicle corresponding with the SUTI. The QSD had to reflect the means by which Mr Trajkovski intended to exercise any approval that he obtained. 144 The defendants argued that there was no warrant for concluding that they were obliged to prepare a SUTI. According to the submission, the clear inference from the whole of the evidence was that Mr Trajkovski had no idea about the requirement upon him to produce or to provide SUTIs. He approached the venture in ignorance of the most fundamental requirements of the approval. It was never envisaged by the parties to the agreement that anyone other than Mr Trajkovski would convert or modify cars. Mr Trajkovski had to produce a SUTI and he never did so. The defendants contended in addition that he never had the means to do so. Discussion 145 It emerges clearly from a comparison and analysis of the parties' competing contentions about the meaning of the agreement that very little, if any, consensus exists. There are undoubtedly good reasons for this. The starting point must be terms of the agreement itself. 146 There can be no doubt that the parties wanted and intended to create, and enter into, an agreement on specified terms. The document signed by them is described as an agreement. It purports in terms to set out the conditions upon which, and subject to which, the agreement is to be reached. Apart from the obligation that the agreement imposes upon Mr Trajkovski to pay a total of $20,000 in accordance with clause 4F, the agreement consists of a list of things that the first defendant is to provide. This follows from the words "RK Findlay will provide the following" at the start of the agreement and from the same words in the introductory portion of clause 4. It is instructive to review these things. 147 Clause 1 requires the first defendant to provide "technical reports specifications and details and technical data necessary compilation [sic] of the submission and all source documents relating to the submission". It almost goes without saying that, standing alone, those words are vague and uncertain and in that sense meaningless to the extent that they contain no indication from which the scope or content of the obligation they purport to impose on the first defendant can be ascertained. The significant words in the clause, which appear twice, would appear to be "the submission". It is necessary to look elsewhere in the agreement for guidance or assistance as to what those words mean or what obligations they contemplate. 148 Clause 2 would appear to require the first defendant to provide "all technical support and training". The words "be included in total" would appear to add nothing to the words "will provide" which qualify the clause. "Technical support" is not defined. "Training" is not defined. Nor does a reading of the balance of the agreement easily liberate or suggest the scope or content of the obligation that they purport to impose on the first defendant. By way of example, the obligation to provide training rather suggests a knowledge or understanding or familiarity on the part of the first defendant with a process that the first defendant will supply to Mr Trajkovski. However, it is impossible to know what it refers to in fact, if it refers to anything at all. It is difficult to imagine how Mr Trajkovski could enforce the obligation that it imposes upon the first defendant or how the first defendant should go about satisfying it. 149 Clause 3 of the agreement has understandably been the subject of a majority of the parties' submissions. It is easily divisible into two arguably distinct parts. It purports to contain two guarantees given by the first defendant to Mr Trajkovski. 150 The first guarantee is "that the submission details test results and specifications fully encompass the information required by the Federal Office of Road Safety for Porsche 911 vehicles from 1975 to 1989 full volume compliance". Presumably "the submission" to which the clause refers is the same as the submission referred to in cl 1. It remains otherwise undefined. The clause is not overburdened with helpful punctuation. It is not immediately apparent whether the draughtsman of the clause intended to refer to "the submission details" and not merely "the submission", as, in effect, a form of particularisation of "the submission" generally. Even if that were the correct interpretation, however, "the submission details" are no more clearly defined or specified. 151 "Test results" are also not defined or specified. Even though Mr Trajkovski and Mr Findlay would appear to profess some understanding (although not necessarily the same understanding) of what the concept of "test results" was designed to convey, the actual meaning of the term is not immediately apparent, if it is apparent at all, on the face of the document. "Specifications" suffers from the same impediment. 152 Be all that as it may, the defendants appear to have guaranteed that these four, or possibly three, things would "fully encompass the information required by" FORS. Presumably the expression "fully encompass" was intended to mean, "completely contain or include". However, the agreement is silent on what is, or might be, "the information required by [FORS] for Porsche 911 vehicles from 1975 to 1989 full volume compliance". Assuming for the moment that the parties knew and understood what full volume compliance for Porsche 911 vehicles for the years in question meant, it is difficult, if not impossible, to glean from the terms of the agreement precisely, or even generally, what information FORS may have required at any time, or from time to time, in order then to work out whether or not whatever the defendants were required to do completely contained or included such information. The troublesome history of correspondence passing between FORS and either Mr Trajkovski or the defendants gives an eloquent indication of the difficulty, if not the impossibility, of the task of limiting or comprehending the boundaries of the expression "the information required by" FORS. 153 The defendants guaranteed secondly "that vehicles converted and modified by Diamond Car Repairs will meet those specifications and be acceptable to [FORS] subject to the normal audit requirements". "Those specifications" are presumably the specifications referred to in the first part of the clause. They remain undefined, unspecified and unparticularised. As will already be apparent from what appears above, there is a dispute between the parties as to what is meant by "converted" and "modified". Moreover, the difficulties with these terms transcend the dispute between the parties about whether or not the agreement related to whole vehicles or to parts of vehicles. At one level it may have been extremely unwise for the defendants to agree to guarantee that something Mr Trajkovski proposed to do, but had not yet done, would meet a set of unknown specifications, by reference to proposed conversions and modifications to vehicles, which are themselves unknown and undefined. At another level it is extremely difficult to understand or to describe in advance what conduct, by way of performance of the agreement, would have complied with the defendants' obligation to provide the relevant guarantee and correspondingly what conduct would have fallen short of compliance. 154 It is not apparent on the face of the agreement what "converted" or "modified" means or what it was intended to include. Mr Trajkovski agreed that it did not relate to bringing a car into the country in parts. For example:- "Q. Now, you wouldn't describe bringing a car in in separate parts as converting it, would you? A. No."

              "A. No. The conversion has something, the conversion is the actual, what we call the conversion is the left-hand to right-hand."

Q. You don't think so? A. No." 158 To the extent that the last answer tends to suggest that Mr Trajkovski held a belief that the agreement extended to cover the importation of motor vehicle parts for assembly as whole vehicles, I reject it as disingenuous. It is perhaps also not without some significance that Mr Trajkovski described the contract in the course of his evidence thus:- "Q. This is a contract you were telling us yesterday that you did not really understand the words in, is that right? A. Yeah and they are still a little bit mumbo jumbo." 159 There would appear to be similar difficulties associated with the notion of a guarantee, performance of which is to be assessed by reference to a discretion reposed somewhere within the Federal Office of Road Safety. Precisely, or even generally, when something is, or is not, "acceptable" to FORS is not explained in the agreement and is not in my opinion otherwise discernible from a reading of the agreement as a whole. The agreement provides not the slightest hint of how FORS comes to a view about whether or not vehicles "converted and modified" in a way that is not specified and cannot be known, are or may be "acceptable", assuming once again that "converted" and "modified" are capable of being understood. It seems to me to be equally unprofitable, but in any event of little importance, to embark upon a search to determine what "normal audit requirements" may be. 160 Clause 4 of the agreement requires the first defendant to "provide" certain things to Mr Trajkovski. None appears to be controversial in the context of the present litigation. It is unnecessary to determine whether or not cl 4 of the agreement imposes ascertainable and meaningful obligations upon the defendants. 161 In J W Carter and D J Harland, Contract Law in Australia, 4th ed, (2002) Butterworths, at [258], the learned authors make the following comments:- "[258] . . . Contract results from the agreement of the parties and it has frequently been said that the courts will not draft a contract for the parties where they have failed to reach agreement. In such cases the parties themselves may have considered that they had reached finality, but the courts will regard them as not having passed beyond the stage of negotiation. Two related, but conceptually distinct, principles are here involved. In the first place, the language used by the parties may be such that the court is unable to attribute to it a sufficiently precise and clear meaning in order to identify the scope of the rights and obligations agreed to. In such a case there is in fact no concluded agreement and the alleged contract will be held to be void for uncertainty. Second, even though the language used is perfectly clear in its meaning, if some important part of the transaction is yet to be agreed upon there is, despite appearances, in truth no completed agreement and the alleged contract will fail for incompleteness. In any given case there may in fact be elements both of uncertainty and incompleteness." 162 None of these difficulties appears to have constrained either Mr Trajkovski or Mr Findlay from proceeding in a way that suggested that they each knew and understood what the agreement meant. Accordingly, Mr Findlay set about producing what he ultimately delivered to Mr Trajkovski under cover of a letter of 24 November 1994 described as "a full volume compliance application complete with quality assurance . . . for full volume on Porsche 911 Series 1975-1989 . . .". The minutes of the meeting of 16 February 1995 in Canberra adequately collate the deficiencies in the application. This is unsurprising. It appears that Mr Findlay compiled it in a 'cut and paste' process from a previous application submitted in respect of "Boom Trikes" on behalf of a former client. Whatever may have been the reason for it, the material produced by Mr Findlay fell well short of anything approaching FORS' requirements for a full volume compliance application. The existing gulf between FORS' requirements and Mr Findlay's assurances was never bridged. 163 Indeed, by 5 October 1995 when Mr Core wrote to Mr Trajkovski, reminding him that the enterprise upon which he had embarked required him "to meet the same standards of performance as a major international car manufacturer", Mr Trajkovski and Mr Findlay could have been in no doubt about the magnitude of the enterprise. It is in these circumstances difficult to understand what Mr Findlay intended to convey if in November 1995, as Mr Trajkovski alleges, he said to Mr Trajkovski that he was "almost there with getting compliance plate approval from FORS". Such a statement is substantially contradicted by Mr Glynn's facsimile on 3 November 1995 concerning the state of affairs in relation to the application for compliance plate approval. 164 Mr Trajkovski comes to this Court seeking damages upon the basis of a series of alleged failures by the defendants. The existence or otherwise of those failures by the defendants falls to be determined by reference to the terms of the agreement. In my opinion the terms of that agreement are "irremediably obscure": see par [104] above. I am of course particularly conscious that "[i]n a commercial agreement the further the parties have gone on with their contract, the more ready are the courts to imply any reasonable term so as to give effect to their intentions": F & G Sykes (Wessex) Ltd v Fine Fare Ltd [1967] 1 Lloyd's Rep 53 at 57. I am also acutely aware that "[w]hen parties have shown by their conduct that they understand and can apply the terms of the contract without difficulty, a court should be very reluctant indeed to pay no attention to such conduct by holding that the terms of the contract are unintelligible by reason of uncertainty": York Air Conditioning and Refrigeration (A'asia) Pty Ltd v The Commonwealth (1949) 80 CLR 11 at 53. In the present case this wisdom is to some extent reinforced by the fact that representatives of FORS themselves from time to time appeared to understand what the parties intended. It has been said that "[i]n such situations the courts tend to uphold the contract on the basis that by their actions in performance the parties have supplied the elements which previously were absent": Contract Law in Australia (supra) at [269]. 165 However, this analysis breaks down when attention is directed to ascertaining precisely what it is that the defendants failed to do. Even if the parties and FORS proceeded upon the basis that each knew or assumed what the other or others were doing or intended until problems arose, the same could not be said after that point had arrived. The competing submissions of the parties, set out in detail above, amply emphasise this point. 166 A good example of this can be found in the dispute relating to production of SUTIs. The agreement is completely silent upon the issue of whose responsibility it was to produce them. Mr Trajkovski has argued that the issue is irrelevant because the defendants' obligations under the agreement all antedate the need to produce such a vehicle or series of vehicles. On the contrary, the defendants argue that it is not possible to determine the issue of whether or not the guarantees described in cl 3 of the agreement had been performed until one more of such vehicles had been produced. Quite apart from the absence of any reference to this in the agreement, the parties appear never to have turned their minds to it until it was exposed in the course of the present litigation. 167 An even more troublesome issue, however, is what is meant by the word "modified". Mr Trajkovski has been unable to demonstrate that either he or Mr Findlay understood or could apply the terms of the agreement to the extent that it applied to Mr Trajkovski's proposal to modify vehicles. (Just how a SUTI or SUTIs could be produced to accommodate ad hoc modifications has also never been explained). It will be recalled that Mr Findlay denied that he ever understood that the agreement extended to the assembly of vehicles constructed from imported parts as opposed to whole vehicles or, to like effect, that Mr Trajkovski had ever told him this before the commencement of the present proceedings. I accept Mr Findlay's evidence in this regard. The agreement makes no reference to parts or to importing parts. Moreover, the cross-examination of Mr Trajkovski, particularly the passage recorded at par [125] above, convincingly demonstrates that Mr Trajkovski, without reference to Mr Findlay, came only lately to the idea of assembling vehicles from parts. 168 However, even if the assembly of vehicles from parts had been a proposal that the full volume compliance specification should have accommodated, there is simply no way of knowing what it was that Mr Findlay was guaranteeing in this respect. This is particularly significant (as Mr Trajkovski's submissions point out, although with a different emphasis) "in light of the expert evidence (from both Mr Trajkovski and [the] defendants) that a properly drafted QSD would need to be specifically drafted to cater for Mr Trajkovski's proposed importation of vehicles in parts". 169 This is an example of something to which the parties did not properly or adequately turn their minds when the agreement was made, which cannot easily be furnished by a reasonable bystander and which is shown plainly to be meaningless when assessed in terms of the defendants' compliance or performance. The question, "what should the defendants have provided to Mr Trajkovski, but which they failed to provide, in order to permit him to import Porsche car parts and convert and modify them, or vehicles assembled using them, in ways that are unspecified" does not admit of any obvious answer. While there can be no doubt that the defendants gave a guarantee, assessing the consequences of their failure to perform it is in my opinion "utterly impossible": see Hammond v Vam Ltd [1972] 2 NSWLR 16 at 18. In my opinion, the contract sued upon is void for uncertainty. Any reasonable attempt to give it a practical operation according to its terms permits of no other conclusion. 170 The scope and content of the duty contended for are indistinguishable from the terms of the contract. They are equally elusive. It is not possible to form a sensible view of whether or not there has been a breach of the duty owed by the defendants without any way of understanding the relevant boundaries of the duty. Conclusion 171 It follows that Mr Trajkovski has wholly lost the benefit of the consideration paid by him to the defendants pursuant to the agreement. According to Mr Trajkovski, the consideration actually paid by him under the agreement represents a clearly established head of loss for reliance damages: McRae v Commonwealth Disposals Commission (1951) 84 CLR 377 at 419. He would accordingly be entitled to receive the sum of $10,000 paid by him on 27 October 1994 in damages, together with interest thereon at court rates from 25 November 1994, being the date upon which the application was provided to Mr Trajkovski by the defendants until judgment. I did not understand this result to be contested by the defendants. Further matters 172 Despite my conclusions in relation to the contract, and against the contingency that others may have a different view, it is appropriate that I record my findings in relation to the following further matters. 173 To start with, I consider that whatever obligations the agreement imposed upon the defendants, it required Mr Trajkovski to assist or cooperate with the defendants to perform them. This included, but was not limited to, responding in a timely way to requests from FORS for further information concerning the application. The defendants argued that not only did this not occur but that it coincided with an attempt by Mr Trajkovski to limit the extent to which the defendants were able or required to communicate directly with FORS about the status of the application. This is important if only to the extent that each of these factors would appear to have created, or at least to have been associated with, delays that have formed the basis of some of Mr Trajkovski's complaints. 174 The defendants have referred to this as taking them out of the information loop. The letter written by Mr Trajkovski (referred to at par [78] above) is curious to say the least. It is consistent with Mr Findlay's evidence of a conversation with Mr Mackay at FORS in which he told Mr Findlay that they had been requested to deal only with Mr Trajkovski. It is not possible finally to resolve this conflict, having regard to Mr Trajkovski's denial of such a direction to FORS. It seems reasonably apparent, however, that Mr Trajkovski was becoming frustrated with what to him appeared to be unnecessarily slow progress with the application. I am not satisfied that the defendants were relevantly excluded from the approval process or sidelined in the way suggested, or that Mr Trajkovski interfered in the performance of the defendants' obligations or duties so as thereby to relieve them from the consequences of non-performance. 175 It also has to be remembered that Mr Trajkovski's case was that as long as one car was plated with a compliance plate approval before 30 June 1995, others could be brought in and plated before 1 January 1996 and sold at any time. The first hurdle for Mr Trajkovski was to get one vehicle plated before 30 June 1995 so that he could thereafter have imported a quantity of complying vehicles before the cut-off date in 1996. This was described as the loss of opportunity case. 176 In my opinion, this was never possible or at best not likely. The agreement was made on 26 October 1994. Mr Findlay produced something by 24 November 1994. The application was delivered to FORS "in late November". Nothing was heard from FORS until the meeting in Canberra on 16 February 1995 had been suggested and held. The minutes of the meeting make it clear that much work was needed to meet the FORS requirements. I find that it was in response to what he was told at the meeting that Mr Trajkovski unilaterally decided to amend the scope of the application from 1975-89 Porsches to only 1986-89 models and that he did this without Mr Findlay's prior knowledge or any consultation with him. In particular, I find that Mr Trajkovski changed the scope of his proposal at this meeting when, in his own words, he first became aware of the implementation of ADR 69/00 and of the significance of the 30 June 1995 cut-off date. As he said in cross-examination:- "A. I was advised about ADR69 in the February meeting." 177 Mr Trajkovski's evidence also makes clear what his understanding was and when he had it. For example:- "Q. All I want to know is, did you know in February 1995 that any of the Porsches imported into Australia and fitted with a compliance plate after 1 July 1996 [sic 1995] needed to comply with an ADR69? A. Yes." 178 Mr Trajkovski argued that such a reduction in scope could have had no result upon which the defendants could usefully rely. In other words, anything reducing the scope of the application would only have the effect of limiting the defendants' work and would have a corresponding beneficial effect upon the likely time required for assessment by FORS. There is no direct evidence of this and I am not satisfied that it can be assumed that it necessarily follows. It is not in any event a variation that the defendants could rely upon as somehow discharging whatever was their obligation to Mr Trajkovski to produce the relevant submission. This is to be contrasted with the reliance by Mr Trajkovski upon a parts based scheme (discussed below), which I consider fell outside the terms of the agreement howsoever understood. 179 It would also have been necessary for Mr Trajkovski to produce a SUTI, or more correctly, a series of SUTIs, before 30 June 1995. I am wholly unconvinced that Mr Trajkovski ever had any chance of doing so by this date. This is discussed below. 180 I also find that Mr Findlay had no knowledge or forewarning of any proposal or intention on the part of Mr Trajkovski to import vehicles in parts as opposed to whole vehicles. It follows, in my view, that whatever the agreement meant, it was never intended to, and therefore did not, extend to such a scheme. The defendants maintained that if the subject Compliance Plate Approval had been granted, it would only have entitled Mr Trajkovski to import complete vehicles and convert them from left-hand drive to right-hand drive in order to meet registration requirements but would not have entitled him to import vehicles and parts and thereafter to assemble them. It will be recalled that Mr Trajkovski said that in around November 1995, "on the promise of obtaining compliance plate approval I imported ten Porsches (in parts) to be assembled and fitted with compliance plates pending approval from FORS." I reject that evidence. 181 First, I find that Mr Trajkovski did not import ten Porsches in parts at all. The only evidence suggests that he may have imported parts for four vehicles but the extent of the evidence does not permit a finding of precisely what was involved. As discussed at par [54] above, Mr Trajkovski was only able to produce a bill of lading relating to four of these Porsches. The document described the vehicles as "body shells". The cost of the vehicles is not given. Mr Trajkovski said that he was unable to locate any other bill of lading itemising the remaining (presumably six) vehicles. There is no evidence of the cost of these vehicles either. 182 Secondly, I find that Mr Trajkovski did not form any intention to import vehicles in parts until shortly before the meeting that he had on the Tuesday prior to 5 October 1995. On that day Mr Core wrote to him (see par [51] above) and referred to this topic saying, "I understand your business plans involve importing vehicles as components rather than as complete vehicles". The absence of any reference to this plan in any documentation emanating from FORS earlier suggests that it had not been part of Mr Trajkovski's business plan at any time much, if ever, before this. It follows that Mr Trajkovski would not have revealed any such proposal to Mr Findlay when the agreement was formulated because the plan had not by then crystallised. It is also significant that the agreement does not give any flavour of such an intention, although the agreement suffers from so many inadequacies that it may not provide a reliable indicator one way or the other. 183 Thirdly, the cross-examination of Mr Trajkovski at par [125] above, is significant. I reject Mr Trajkovski's evidence, when asked whether or not he told Mr Findlay that he proposed to import parts, that he could not recall whether he did or he did not. It was absent from his original affidavit. I find his resort to the answer, "I mean, I can't remember what actually happened" amounts to evidence that he did not inform Mr Findlay of any such intention. I accept that Mr Findlay would never have been prepared to become involved "in a parts based scheme". 184 It was also Mr Trajkovski's case that he would have been able to import and assemble up to 40 vehicles from parts before the cut-off date of 31 December 1995. There is no satisfactory evidence that he could have sourced parts for this many vehicles or precisely how he would have done it. The evidence relating to the four that he did manage to locate gives me no confidence that he had either the intention or the capacity to do so. Nor does the evidence about the state of his premises satisfy me that there was a capacity to store and assemble 40 vehicles there in the short time involved or that his proposed new premises would not have been in the course of demolition or construction. He gave evidence about some conduct involving the importation of parts as follows:- "Q. But you can't tell us how many Porsches you imported from Los Angeles prior to January 1995 prior? A. Prior to January 1995, no, no. There's boxes and boxes of photographs of cars, we've done, there's so much.

HIS HONOUR: In other words, each vehicle manufactured would in effect have to be its own SUTI? A. Indeed. That is my contention, Your Honour." (Emphasis added). 191 This evidence is further explained and clarified in the light of this answer that he gave earlier:- "Q. That would indicate to you, wouldn't it, that a representative vehicle had been provided to FORS? A. I find it difficult to believe that a representative vehicle can be produced out of used components every vehicle will be different invariably if produced from used components , if produced from new parts suitably stamped with more numbers are suitably characterised for that particular manufacture of vehicle and assembled in accordance with the manufacturing procedures identified by Porsche, then a representative vehicle can be produced and repeatedly sold." (Emphasis added). 192 Finally on this topic Mr Enkelman said at transcript 345:- "It is my contention, as I have said before, that it is not possible to produce a representative vehicle fully compliant with all ADRs out of second hand components." 193 The evidence of Mr Chrisis and Mr Enkelman on this issue appears to be to the same effect. Mr Chrisis agreed that in building a representative vehicle one would have to allow for all possible variations in the vehicles that might be imported. The representative, or SUTI, vehicle provides a specification with which every other imported vehicle would have to compare and comply. This means that, to the extent that every vehicle constructed out of assembled components is different, a separate SUTI for that vehicle would be required, or in practical terms, each such vehicle would become its own SUTI requiring in each case a separate approval from FORS. If Mr Trajkovski's proposal to construct vehicles from imported cars were to be subject to such a qualification, as I find it must have been, it would have been or become impractical and unworkable. Any losses claimed by Mr Trajkovski upon the basis of the loss of an opportunity to import separate parts and construct whole vehicles from the ground up would in my opinion be illusory. I have some considerable doubt that Mr Trajkovski would have been able to produce six SUTIs in the context of the formula of three model variants multiplied by two model ranges discussed above at par [136]. I make no finding on that issue. However, I find on the balance of probabilities that Mr Trajkovski would not have proceeded to successful production of vehicles constructed from parts if the approval process were to be confronted, as I find it was, with the need to produce a separate SUTI for every novel combination of reconstructed components.

Q. If you were, on what you've seen, called upon to devise a build plan in this case, how long do you think you would need to do it? A. There would be weeks of work involved." 199 As I understand the evidence, there was also a very high prospect that some of the tests required to be performed on SUTIs would themselves be destructive of motor vehicle components, including possibly in some cases components as significant as complete body shells. Mr Trajkovski's enterprise could not in my view have withstood the time or expense involved in this requirement, particularly having regard to the significant likelihood that it would have been difficult to produce regularly conforming vehicles referable to only a limited number of SUTIs. 200 It is also to be observed that no part of Mr Trajkovski's claim in these proceedings relates to the recovery of any sums expended upon preparation for SUTI manufacture or testing. This does not in my opinion sit comfortably with the notion that Mr Trajkovski imported Porsche parts in reliance upon what he claimed to be assurances from Mr Findlay that approval was imminent. Even if approval is understood to be limited in this context to FORS' approval subject to the provision of SUTIs, a notion that I consider makes no sense in the circumstances, it is unusual to say the least that Mr Trajkovski was not gearing up his workshop for the construction of a SUTI and that the expenses of doing so would have formed part of his losses allegedly recoverable from the defendants. I accept that the significance of this point should not be over-emphasised, but it is not entirely without consequence. 201 Next, Mr Trajkovski's case on damages was promoted upon the basis that losses he allegedly incurred were formulated by reference to the sale of comparable, but genuine, Porsche motor vehicles. It goes without saying that this involved, and would have required, that the cars he was selling would be sold as "Porsches". However, his ability to do this, and the evidence about comparable sales of genuine Porsche vehicles, has to be considered in the light of the following evidence that he gave in cross-examination:- "Q. You didn't have approval by the way from Porsche Australia to use the name Porsche in the cars you were going to sell, did you? A. No compliance plate holder, I don't think, does that.

Q. As at 94? A. No." 218 At one point during cross-examination of Mr Trajkovski I raised some matters that were then of some interest to me as I saw the case developing. I said this:- "HIS HONOUR: . . . What I'm interested to know is, I suppose in both cases; that's to say, the plaintiff's case and the defendant's case, I'd like to know what the competing evidence is on the time lines for sourcing, buying, shipping, getting through customs, clearance, transport to Kogarah, sourcing parts not imported, build times, and I would be assisted I suspect to know what was the reliability of the supply of Porsches in any of the categories we've discussed in which Mr Trajkovski may have been interested in 1995, both overseas and here. It may be that this is material I have not yet got to, but Mr Trajkovski has nominated two named suppliers and it may be that it's not possible now by reference to their records to know what stock was on their books or in their yard in the relevant period and we'll have to make some assumptions based upon evidence from experts who were familiar with the trade at the time." 219 I am not satisfied that Mr Trajkovski had the ability to draw all, or many, of these things together in a practical or realistic way. Mr Trajkovski's approach to the enterprise to my observation was to try to rely upon his experience with a previous enterprise of a different type and on a smaller scale as a basis for proof of the likelihood of success of a rather different business. As he said:- "Q. But there was no guarantee from that contract you would be able to sell a single car was there? A. I knew my business." In my opinion, this was the triumph of hope. 220 Mr Trajkovski's submission was to this effect:- "6.4 There is a strong likelihood that Mr Trajkovski would have been in a position whereby he could have made a substantial profit in the time available if RK Findlay Pty Ltd had performed its obligations under the agreement, and RK Findlay Pty Ltd and Mr Findlay had not breached their duties of care to Mr Trajkovski." 221 In the circumstances as I have outlined them, I am unable to accept that submission. 222 In summary, therefore, my further findings are as follows:- 222.1 If there was a variation of the agreement from one relating to 1975-89 vehicles to one relating to 1986-89 vehicles, that variation was not such that the agreement ceased to govern the relationship between the parties.

Trajkovski v R K Findlay Pty Ltd

At a glance

Court

Decision date

Before

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Judgment (349 paragraphs)

Parties

Cases Cited (9)

Cited By (1)