CATCHWORDS Trade Practices —- Consumer Protection —- Limitation Period for laying informations - Applicant unable lo establish that representations made within the lamitation period —- Meaning of the word "new" - Whether a "Guarantee" was false or merely not honoured - Meaning of "benefit" -— Whether a fiscal advantage is a "benefit" attaching to goods. ~ Trade Practices Act 1974 s. 53 (a) (b) (c) (g). LEE STEPHANIE HOLLIS v. A. B. FE. COPIERS PTY, LIMITED LOCKHART J. 22 JUNE 1979 No. G 25 of 1978 No. G 26 of 1978 IN_ THE FEDERAL COURT OF AUSTRALIA No. G 27 of 1978 No. G 28 of 1978 GENERAL DIVISION No. G 29 of 1978 IN _THE MATTER of Tits TRADE PRACTICES ACT 1974 BETWEEN : LE STEPHANIE HOLLIS Informant A.B... COPIERS PTY. LIMITED Defendant ORDER JUDGE MAKING ORDER: LOCKITART J. DATE OF ORDER: FRIDAY 22 JUNE 1979 WHERE MAD: SYDNEY THE COURT ORDERS TIIATs The five informations be dismissed Informant pay the defendant's costs including reserved costs. ) No. G 25 of 1978 IN THE FEDERAL COURT OF AUSTRALIA ) No. G 26 of 1978 No. G 27 of 1978 GENERAL DIVISION No. G 28 of 1978 No. G 29 of 1978 IN THE MATTER of THD TRADE PRACTICES ACT 1974 BETWEEN: LEE STEPHANIE HOLLIS Informant AND: A.B.LE. COPIERS PTY. LIMITED Defendant Le 1979 LOCKHART J. REASONS FOR JUDGMENT These are four charges alleging contravention by the defendant of certain of the consumer protection provisions of the Trade Practices Act 1974 ("the Act"). By consent the charges were heard together. Five informations were laid by Lee Stephanie Hollis ("the unformant") on 29 November 1978 and five summonses were 1ssued that day. One of the charges (G 29 of 1978) was not proceeded with, The four charges are that in the month of December 1977, at Brisbane, the defendant, a company incorporated according to the laws of New South Wales: (1) did in contravention of s. 53 (b) of the Act in trade or commerce in connection with the supply of goods falsely 2/2 represent that goods were new in that the defendant did in connection with the supply to one Andrew Edward Brown of a U-BIX Model 101 plain paper photocopying machine bearing the serial number 6811242 represent to the said Andrew Edward Brown that the said machine was new whereas it was not then a new machine but had been previously supplied by the defendant in February 1977 to Bain Dawes Qld. Pty. Ltd. a duly incorporated company (G 25 of 1978); did 1n contravention of s. 53 (g) of the Act aun trade or commerce in connection with the supply of goods make a false statement concerning the effect of a guarantee in that the defendant did in conneclion with the supply to Andrew Edward Brown of the said machine make a statement to him that the defendant would buy back the machine for seventy per centum of $3,995.00 during the first year after purchase of the said machine whereas the defendant upon being required by Andrew Edward Brown to buy back the machine in accordance with the said statement for the said amount stated that it would buy back the said machine only for seventy per centum of $2,500.00 (G. 26 of 1978); 2/3 (3) (4) did in contravention of s. 53 (c) of the Act in trade or commerce in connection with the supply of goods falsely represent that goods had a benefit they did not have in that the defendant did in connection with the supply to Andrew Edward Brown of the said machine represent to him that a forty per centum taxation investment allowance would be available to Andrew Edward Brown in respect of the said machine, the said machine being a new machine, whereas an investment allowance pursuant to s. 82AB of the Income Tax Assessment Act 1936 as amended was never available in respect of the said machine to Andrew Edward Brown, it not being a new machine within the definition of "new" in s. 82AQ of the said Act. (G. 27 of 1978); did in contravention of s. 53 (a) of the Act in trade or commerce in connection with the supply of goods falsely represent that goods had a particular history in that the defendant did in connection with the supply to Andrew Edward Brown of the said machine represent to him that the said machine was not a secondhand machine whereas the said machine had been previously supplied by the defendant to Bain Dawes Qld. Pty. Ltd. a duly incorporated company 1n February 1977 and had since been Jt regained by the defendant (G. 28 of 1978). The informant's case rests essentially upon the evidence of Andrew Edward Brown to whom each of the representations and statements is alleged to have been made. He was the only witness called by the informant. Andrew Edward Brown is a solicitor who has been carrying on practice in Brisbane since September 1977. Before then he was employed for a time in the Trade Practices Commission. The defendant is a company incorporated in New South Wales, with its headquarters there and branches in all States. It carries on the business of supplying U-Bix plain paper photocopying machines. Mr. Brown wished to obtain a photocopying machine to use in his practice. In November 1977 he received through the mail an advertisement for a photocopying machine supplied by the defendant. He telephoned the defendant's Brisbane office and a sales representative, Mr. Eddie Robinson, called to Mr. Brown's office. Mr. Robinson was connected with a company that was itself an agent of the defendant. That company ceased to be an agent late in January 1978. Neither party called Mr. Robinson to give evidence. Mr. Brown gave evidence of a number of conversations between himself and Mr. Robinson both before and after delivery of the U-Bix Model 101 plain paper photocopying machine, serial number 6811242 the subject of these proceedings ("the machine"). 22/5 Mr. Brown admitted having difficulty remembering the actual words and dates of conversations. He said he tended to remember things "in concepts" and that certain conversations "are merged in my mind". Not surprisingly, he was unable to relate the precise text of any conversation. Sometimes he recalled the substance of a conversation; but at other times not even that. He acknowledged that certain evidence given by him as to dates of conversations was based on reconstruction from documents. In particular, he assumed from a delivery docket signed by him and dated 1 December 1977 that the machine had been delivered that day. He said that he used that document to "reconstruct" the dates of conversations which he says took place between himself and Mr. Robinson on 29 and 30 November 1977. In cross-examination, when shown a document dated 30 November 1977 relating to delivery of the machine, which he admitted bore his signature, he acknowledged that it was possible that the machine was delivered, not on 1 December but on 30 November and said: "that could easily be the case." He said that he could not sever the conversations that occurred before the machine was delivered. Norman Leslie Firman gave evidence for the defendant. He is, and has been since September 1977, Queensland State Manager for the defendant. He said that he had a number of discussions during November 1977 with Mr. Robinson about a model 101 ABE copier and a Mr. Brown and that the first of those discussions took place about the middle of November 1977 when Mr. Robinson said that he was hopeful of obtaining an order from Mr. Brown for a model 101 machine. ..-/6 Mr. Firman said that towards the end of November 1977 he had a conversation with Mr. Robinson about a model 101 machine and Mr. Brown relating to Mr. Robinson's commission. I accept Mr. Firman as a truthful witness. I will deal later with the reliability of Mr. Brown as a witness; but shall say now that I accept him as a truthful witness who endeavoured to give his evidence as accurately as possible. However, I do not accept that the conversations which he said initially in his evidence took place on 29 and 30 November necessarily took place then. I am satisfied they occurred but somewhere between about mid November 1977 and 30 November 1977, and possibly before 29 November. The date or dates on which the representations or statements are said to have been made is not without significance, as the prosecution must be commenced within on year after the commission of the alleged offences. If the representations or statements were made before 29 November 1977 the informations would be bad: see s. 21 of the Crimes Act 1914 which requires a prosecution to be commenced at any time within one year after the commission of the offence. In computing the period of one year you do not count the day on which the offence occurred. If the offences occurred on say 28 November 1977 you exclude that day and count one year from 29 November 1977; so that as the informations were laid on 29 November 1978 the charges would be one day out of time. See Radcliffe v. Bartholomew 1892 1 Q.B. 161; Marren v. Dawson Bentley & Co. Ltd. 1961 2 Q.B. 135; Pritain v. S. Russell & Sons 1973 1Q.B. 336. Also, the informations confine the representations or statements to ee e/7 the month of December 1977. I now turn to the conversations themselves. Mr. Brown said that in the first of his conversations with Mr. Robinson he asked Mr. Robinson what the price of the defendant's photocopying machine would be and that Mr. Robinson replied:- "As you know, we have a special promotion this month which was the reason for sending the original card. The list price of the machine is $3,995.00 but because of the special promotion, we could sell it to you for $3,100.00. We will offer you our guarantee even though we are selling the machine to you for $3,100.00. The guarantee will be on the list price of $3,995.00. We will guarantee to buy the machine back." Mr. Brown said he thought Mr. Robinson said that the machine would be bought back for 70% or 40% of the original price of $3,995.00. He says he made a note of that because it was very important to him. He does not have the note. Mr. Brown said:- "That is a little high for me at the moment but what would be the running cost of it..." Mr. Robinson said:- "There is an advantage in buying it at this time and secondly you would be aware of the advantage of buying this financial year because of the 40% investment allowance as opposed to buying it later. If you are going to buy a photocopying machine, now would be the appropriate time to buy it because of our special discount and you can certainly buy it in this financial year." Mr. Brown said to Mr. Robinson that he would talk with other companies and then get in touch with Mr. «2/8 Robinson. Mr. Robinson said:- "Would you like the machine on a trial, so that you can see the advantage of having 1t in the office. You can determine our copy quaiity". He then produced examples of the copies produced by one of the defendant's machines. Mr. Brown said that on that occasion he signed a piece of paper which he understood to be an authority for the delivery of the machine. He did not understand it to be an order form. The document records an order for a machine at a price of $2,500.00 plus a delivery and installation charge of $30.00 making a total of $2,530.00 together with certain "copy kits" for $280.00 each. The document records 1n printed form that 1t 1s "a binding order not subject to cancellation or alteration except by an authorised ABE officer", It bears in brackets in handwriting the words "subject to a 2 day satisfactory trial". It 1s dated 29 November 1977 and states, amongst other things, that the ABE representative is "E,. B. Robinson," Mr. Brown did not deny, but would not admit, that the signature towards the bottom of the document was his Signature because he said that he did not recall signing a document purporting to be an order form which included the statement of the price, although he recalls the document did bear the words "subject to a 2 day satisfactory trial". Mr. Brown says that Mr. Robinson took the document with him and that, after he left, Mr. Brown telephoned a number of companies that sold photocopying machines. He says that later Mr. Robinson telephoned him and asked him if ho had got in touch with other companies to which Mr. Brown said that he «2/9 had and that he had received more competitive quotes than that of the defendant. He says he told Mr. Robinson that he had received quotes from companies including a quote from a company selling "Sharp" machines for $2,600.00 and that Mr. Robinson said: "We will see what I can do". Mr. Brown said that he intended to make some more phone calls and obtain more quotes. Mr. Brown said that he later spoke to Mr. Robinson again by telephone and said: "The quotes are creeping down", and that he could get a "Sharp" for $2,500.00. One of the organisations with whom Mr. Brown got in touch was a company or firm described in the evidence as "Berwick" which sold machines called "Sharp" machines. Mr. Brown said that after he had seen the Berwick representative he said to Mr. Robinson that he was not very interested in the defendant's machine if it was going to cost $2,600.00, to which Mr. Robinson replied that he could get a machine for him for $2,500.00, that it was a machine currently on the defendant's showroom floor and had a number of copies run off on it and that its price would be $2,500.00. He said that would be "eating into his commission". Later Mr. Brown got in touch with other companies who supplied photocopying machines. He had a conversation with Mr. Robinson after he had obtained a final quote from "Alec Berwick" of $2,600.00 and said he told Mr. Robinson that his final quote from Sharp was $2,400.00 to which Mr. Robinson said that he could not match that offer and stressed the importance of the service provided by the defendant. Mr. Robinson told him that the machine would arrive 222/10 -10- at the end of the week and that it would be a good opportunity to test the quality of the machine. Mr. Brown asked Mr. Robinson if he would mind if he kept the machine over the weekend, to which Mr. Robinson said that he could do so. Mr. Brown said that prior to the date of delivery of the machine it had been agreed between himself and Mr. Robinson that if he, Mr. Brown, decided to buy the machine from the defendant, the price would be $2,500.00 and that the fixing of the price of $2,500.00 resulted from a number of conversations with Mr. Robinson over a period of time, the actual time being unclear to him but it did precede delivery of the machine. During the time he first spoke to Mr. Robinson and the time the price of $2,500.00 was fixed and arrangements made for delivery he had discussions between himself and Mr. Robinson and also discussions with salesmen from other companies who supplied copying machines. He agreed in cross-examination that it could be the case that the conversations with himself and Mr. Robinson and the "shopping around" with others took place over a number of days before the price of $2,500.00 was fixed. During the time of "shopping around" and talking to Mr. Robinson, he kept an open mind as to what brand of machine he would ultimately acquire. At one point in his cross-examination, Mr. Brown said that it was possible that the price of $2,500.00 was agreed upon between himself and Mr. Robinson either on or before 29 November 1977; yet at an earlier point in his evidence, also during cross-examination, he said that he would not agree that it was even possible that the price of $2,500.00 was agreed wee/1l -Ll- upon between himself and Mr. Robinson on or before 29 November. He put the date as being somewhat later. In my opinion the conversations between Mr. Brown and Mr. Robinson fall into two categories: before and after the delivery of the machine. I am Satisfied that the substance of the conversations which Mr. Brown says preceded delivery are accurate accounts of the conversations; but I am not satisfied as to when the conversations took place, except that they must have been before 1 December 1977, as that is the last date on which delivery of the machine could have taken place. I am not satisfied that any relevant conversation took place on the day or two days before the actual date of delivery. There were conversations between Mr. Brown and Mr. Robinson which took place between about mid November 1977 and before delivery of the machine. I am satisfied that all of the relevant conversations that preceded delivery may have taken place before 29 November 1977. This point is critical as the informations were laid on 29 November, 1978. Some time after delivery, Mr. Brown says that it could have been the day of delivery or shortly there- after, he spoke to Mr. Robinson and told him that he noticed the machine was "minus 84". Mr. Robinson said:- "The boys have tidied up the machine for you. «+./12 They have re-o1led it, put a new kit 1n it and it was in that process that the counter was wound back a little too far." Mr. Robinson asked him whether he was happy with the machine and whether it was causing him any trouble. Mr. Brown said that he was happy wath it and the copy quality seemed good, but he would do the final test on 1t on the weekend. Mr. Brown said that the next conversation between them "could have" taken place during the two day test period and that there was a brief conversation between them very soon after delivery of the machine. He said that he told Mr. Robinson that a Berwick salesman had told him that the machine was a re-conditioned machine as he knew that the defendant could not sell a machine for $2,500.00 unless 1t was re-conditioned. Mr. Brown asked Mr. Robinson if 1t was a re-conditioned machine and Mr. Robinson said that 1t was not. Mr. Robinson said:- "No. It is a new machine. As I have already explained to you, 1t has been on the showroom Floor. It has had copzes run off", Mr. Brown asked him af he knew how many copies had been run off and Mr. Robinson replied:- "No. Normal showroom usage which is not very much which is nothing 11ke normal usage, for a very short period of time." During that conversation Mr. Brown said he needed to check 1f a machine which had been on the showroom floor was in fact a new machine and said:- 222/13 -13= "T am satasfied myself that provided that 1t is not a secondhand machine, a re-conditioned machine, and 1t has Just been on the showroom floor for a short period and a small number of copies run off, it will be a new machine to attract anvestment allowance." Mr. Robinson said:- "Yes, and of course we will be snvoicing the machine to you as a new machine. Of course, if you are ever not satisfied with the machine and the fact that it has had a number of copies run off on it, remember the guarantee, that we will either replace the machine or we will buy it back for the set percentages." Mr. Brown said:- "Yes. I am glad you mentioned that. That 1s important to me". There were other telephone conversations subsequently, but Mr. Brown does not recall what was said. On or about 5 December 1977, Mr. Robinson delivered a letter to Mr. Brown, the letter being on the letterhead of the defendant and signed by Mr. Farman as Queensland manager. The leiter is in the following terms :- "Dear Sir, I thank you for the courlesies extended to our Mr. Eddie Robinson and have pleasure in submitting the following proposal. MACHINE COST 1 only U-~B1ix Model 101 Plain Paper copier $2500.00 LEASING 60 months guaranteed Fixed Cost Lease Rent at $ 56.77 Residual Value 20% DELIVERY AND INSTALLATION FEE §$ 30.00 wee /14 copy KITS Each Copy Kit contains sufficient consumables to produce a guaranteed 10,000 copres at $280.00 per kit which = 2.8¢ per copy. +0ef/2 SERVICE AND GUARANTEE Every U~Bix Copier is guaranteed to the original purchaser for five years and all service, including labour and parts, is free of charge as specified in the U-Bix Five year guarantee. PAPER AX - 8f x 11-11/16 $3.58 per ream + Sales Tax if applicable FH - 84 x 13 $4.21 per ream + Sales Tax if applicable BY - 10 x 144 $5.87 per ream + Sales Tax if applicable Discounts available on one order, two deliveries -— 25 - 49 5% 200 - 499 10% 50 = 199 72% 499, = ~~ plus 123% VERSATILITY - MODEL 101 The U-Bix 1s designed to economically cater for convenience copying. The input material can vary from 73 to 85 gsm including - - Bond Paper Letterheads Translucent Paper Clear Film - Double sided copying UrWN = Reproduction of half tones and solids is clear and sharp as the original. COPY SIZES FROM 8" x 7" to 10" x 14%" A B E can service U-Bix equipment in all major centres of Australia through 7 Branch Offices and 22 Dealers. Service 1s guaranteed within 4 hours. Over, 4,000 U-Bix machines have been installed, 2ncluding a large number of national accounts with as many as 40 machines, and we have on file recommendations as proof of customer satisfaction. wee /15 -15- We thank you for the opportunity of presenting this proposal and look forward to your early decision. This quote is valid for 30 days. Yours faithfully, A BE Copiers Pty Ltd. (sed. ) N_L_FIRMAN Queensland Manager" Mr. Brown told Mr. Robinson that he had decided to lease the machine through CBFC Leasing Pty. Limited ("cBrc") and said he was surprised about the charge for delivery and installation as he had a firm price of $2,500.00. Mr. Robinson said he need not worry about that and that he (Robinson) would look after it. In fact, Mr. Brown was never called upon to pay the charge. Mr. Brown told Mr. Robinson that the guarantee mentioned on page 2 of the letter was not in accord with the conversation they had on the firsl day they discussed the machine. Mr. Brown saids= "You know how important the guarantee and trade up agreement 1s to me." To which Mr. Robinson replied:- "Oh well that is gust a standard guarantee. I agree I offered you another one," Mr. Brown gave evidence of what they then discussed about the guarantee; bul his evidence on this was in very general terms and rather vague. Mr. Robinson visited Mr. Brown some days later with a letter dated 7 December 1977. It provided as follows:- 22/16 -16- "Dear Sir, In reference to our recent conversation regarding Guarantee of your Model 101 Copier. (1) If the 101 Copier does not perform due to faulty workmanship by the Manufacturer, and our technical staff are unable to maintain the machine in working order, A.B.E. Copiers Pty.Lamited will replace the machine Free of Charge. (2) A.B.E. Copiers Pty.Limited guarantee after two(2) years to buy back the Copier for 45% of the original purchase price of $3,995.00. We trust you will be happy with your 101 Copier and thank you for the order. Yours faithfully, (sea. ) E. B. Robinson. Area Consultant. EBR: im." Mr. Brown thought that the conversation was later than 7 December, but he could not be sure about it. Mr. Brown told Mr. Robinson that he was not satisfied with the letter and he produced some notes he had made earlier. He told Mr. Robinson that he wanted a letter signed by the Queensland manager and then proceeded to amend the wording in the letter to coincide exactly with his notes. A photocopy of the letter with the amendments on 1t was taken and Mr. Robinson left with it. Mr. Brown kept the original. A couple of days later Mr. Brown received another lettor dated 12 December 1977 in the following terms:-— "Dear Sir, In reference to our recent conversation regarding Guarantee of your Model 101 Copier. (1) If the 101 Copier does not perform due to 22/17 faulty workmanship by the Manufacturer, and our technical staff are unable to mainlain the machine, or any replacement machine hereunder in working order producing copies satisfactory for you, A.B.E. Copiers Pty. Limited wiil replace the machine Free of Charge. (2) A.B.E. Copiers Pty. Limited guarantee after one {2 year to buy back the Copier for 70%, two (2) years for 55% and three (3) years for 40%., of the original purchase price of $3,995.00. We trust you will be happy with your 101 Copier and thank you for the order. Yours faithfully, (sed.) N.L. FIRMAN Queensland Manager." He had a discussion with Mr. Robinson about it. Mr. Brown said that the letter was an accord with the arrangements that had been made and that he would contact OCBIC to make arrangements for leasing. Mr. Brown later arranged to take out the lease with CBFC. Mr. Brown said that during discussion with Mr, Robinson on the day that Mr. Robinson delivered the letter of 5 December, Mr. Brown said that the Berwick salesman was insistent that 1t was a re-conditioned machine and Mr. Robinson said:- "No, It 1s a new machine, the copies have been run off. It comes from the showroom floor, certainly not reconditioned or second- hand." He says that would have been repeated once or twice on different days. The machine was in fact supplied to the defendant on or about 8 February 1977 by Okuru & Co. of Tokyo, Japan; and on or about the same date supplied by the defendant to Bain Dawes, (Qid) of Brisbane. The defendant received .../18 -18- $3,459.00 cash consideration in connection with that supply. It was the same machine that was delivered to Mr. Brown on 30 November or 1 December 1977 and later invoiced to CBFC. Mr. Brown said that he had determined in June 1978 as a result of a conversation with a Mr. Gorski of Berwick that the machine supplied to him had been owned previously by someone else. In June 1978, Mr. Brown spoke to the Trade Practices Commission about the machine. It was not until October 1978 that he mentioned possible breaches by the defendant of the Act. On 24 August 1978, Mr. Brown wrote to the defendant in these terms:- "Dear Sir, I refer to your Agreement embodied in your letter to me of the 12th December, 1977 to purchase back the U-Bix 101 Coper (sic) delivered to me in December, 1977 for 70% of the sum of $3,995.00. I have decided that the photocopying machine will be sold back to you for the sum of $2,769.50. I look forward to receiving your cheque for that sum in the near future and advise that the machine can be picked up as soon as that sum is received. I request a reply within ten days of today's date. Yours faithfully," The defendant replied by letter of 25 August 1978 in these terms:- "Dear Sir, Further to your letter of August, 24th, we agree to honour our agreement to buy back the U-Bix 101, for 70% of the original purchase price. We understand that the Copier is at present under a Lease agreement, therefore, when you hold legal title to the machine, we will arrange to pick it up and make payment for the same of $1,750.00 22/19 ~19- We await your instructions. Yours faithfully, A.B.E. COPIERS PTY. LTD. (sgd.) N.L. FIRMAN. Queensland Manager." Further correspondence ensued between the parties; but it was not until 1 September 1978 that Mr. Brown, in a letter to the defendant, alleged that there had been a false representation that the machine was new, that letter being written in the context of a dispute then on foot between Mr. Brown and the defendant as to whether Mr. Brown should be paid $2,769.00 or $1,750.00 for the machine. Although when Mr. Brown commenced correspondence with the defendant in August 1978 he was aware that the machine had a previous owner, he did not raise that matter either with the defendant or the Commission until after the August correspondence had ensued. Mr. Brown said in evidence that it was his understanding that the defendant was unconditionally agreeing to buy back the machine at the expiration of 12 months for more than the price paid for it by him. When asked as to why the defendant would enter into such an apparently unusual commercial arrangement, Mr. Brown said:- "It would be most improper for me to try and attempt to enforce that literally but I think it was understood between us that there was never any question of improper motives." Later Mr. Brown said in his evidence:- -+-/20 -20—- "The commercial sense was that I was not going to buy the machine unless they agreed to that. So if they wanted to sell that was what they had to do." He agreed that there was a possibility that he would lose the investment allowance if the machine was a reconditioned machine although he denied that one of the factors that might result in his losing the investment allowance would have been the discrepancy between the list price of the new machine $3,995.00 and the actual purchase price that he paid namely $2,500.00. Mr. Brown admitted that he knew the machine was a used machine when he bought it. He said that he had some slight doubt as to whether Mr. Robinson was being truthful when he had put to him the statements by Mr. Gorski that the machine was reconditioned. He said that he could not say firmly or clearly whether the conversation with Mr. Robinson about what Mr. Gorski had told him as to the machine being reconditioned occurred before or after delivery of the machine. It was raised a second time by him with Mr. Robinson, but in a jocular fashion. Mr. Brown said that "as it turned out" he did not need the investment allowance because in the events that happened he did not have a taxable income for the year ended 30 June 1978, although the investment allowance could have been of use to him as it could be carried forward as a loss into subsequent years of income. oe e/2k -21- Although Mr. Brown's evidence that he understood that the defendant was unconditionally agreeing to buy back the machine at the expiration of 12 months for more than he had paid for it, is somewhat odd as it seems commercially unreal, it must be remembered that Mr. Firman said in evidence that the business of the defendant was a highly competitive business at the time and that it was permissible for an agent to sell the machine to Mr. Brown as a new machine for $2,500.00; but in that event the agent would receive no commission and would indeed owe money to the defendant on his commission account. Mr. Firman said that he knew that Mr. Brown had bought a secondhand machine and that he (Firman) set the price of the machine at $2,500.00. He said that he knew when the machine was initially delivered to Mr. Brown that it was a secondhand machine. He said 1n cross-examination that he realised that the sum of $3,995.00 referred to in his letter of 12 December was inappropriate for the sale of a secondhand Machine and that he was very lax in signing the letter of that date allowing Mr. Robinson to take the machine and profer it to Mr. Brown in the hope that he would purchase a new machine. I turn now to the first charge, the subject of proceeding G. 25 of 1978, namely that the defendant contravened s. 53 (b) of the Act by falsely representing that the machine was new. It is clear from Mr. Brown's evidence that he was told by Mr. Robinson, and he understood, that the machine 22 -/22 ~22- which was to be supplied to him was a used machine. He said he knew that the machine was not "a brand spanking new machine." He agreed that he had been told before the machine was delivered to his office that it was a machine that had been on the showroom floor of the defendant and had been used for the purpose of making copies for prospective purchasers of the machine or machines of a like character. Although he knew it was a used machine in the sense that a small number of copies had been run off it on the showroom floor, Mr. Brown said that he nevertheless regarded it as a new machine and a machine that wouid qualify for an investment allowance under the Income Tax Assessment Act 1936. He drew a distinction between a machine of that character and one that had been let out or sent to a prospective customer's premises for trial by him which would put it into the category of what he called a demonstrator, akin to a demonstrator motor car. It is clear from the evidence of Mr. Brown as to the conversations preceding the delivery of the machine that he was under the impression he was buying a new machine, in the sense in which he understood the word "new" in relation to a photocopying machine; but, in my opinion all those conversations may have taken place before 29 November 1977. Accordingly, if the informant is to succeed on this charge, it is necessary for me to be satisfied that a relevant representation as to the machine being new was made on or after 29 November 1977. The informant's case is that after the date of delivery, be it 29 or 30 November 1977, Mr. Robinson made the relevant representations to Mr. Brown as to the machine 22/23 -23- being a new machine during conversations between the two of them when Mr. Brown told Mr. Robinson of what he had been told by a salesman from Berwick as to the machine being a reconditioned machine if the purchase price was $2,500.00. Mr. Brown said:- "Possibly the first conversation on the topic could have taken place during the two day test period - the initial two day test period - but certainly a brief conversation did take place in the ensuing period before I decided to take the machine." He said he could not recall the exact number of days after the machine was delivered in which the conversation occurred, but it was very shortly thereafter. In cross-examination Mr. Brown said that although the first of these conversations would have been after the machine was delivered he did not really remember the dates. He said that he did not wish to swear that the farst of the conversations about what the salesman from Berwick had said was after the machine was delivered. Indeed, Mr. Brown said in his evidence that he did not want to swear that any of the conversations relating to what had been said by the Berwick salesman was after the delivery of the machine. Mr. Brown said that, apart from the initial conversation with Mr. Robinson concerning what had been said by the Berwick salesman, any subsequent conversation about the same subject matter was "in a jocular vein." He said that it may only have been on one later occasion when "it was just passed aside - laughed - you know - ." Notwithstanding the evidence of Mr. Brown as to what was said between himself and Mr. Robinson at the time of delivery of the letter of 5 December 1977, in cross- 222/24 examination he resiled from his earlier evidence that he told Mr. Robinson after delivery of the machine what he (Brown) had been told by the salesman from Berwick about the machine being a reconditioned machine. He could not say whether the relcvant conversations, when the question of the newness of the machine was discussed in relation lo the Berwick salesman, were before or after the delivery of the machine. Mr. Brown could nol segregate conversations between himself and Mr. Robinson into particular conversations. They all tended to "merge" one into the other. He tended to think of them in terms of "concepts". He "reconstructed" from documents the dales on which certain critical conversations took place. He had no contemporaneous notes relaling to any relevant conversation, although he said that he took some notes of certain conversations which he has no longer, These and the other matters to which I have referred earlier together with my observation of Mr. Brown in the witness box have led me to conclude that although he was a truthful witness, I cannot rely upon his evidence as to when conversa- tions occurred or as to what was said during those conversations excepl as to their broad outline. Ii is as well to remember thal the defendant is charged with offences which, 1f found proved, may result in its suffering a substantial pecuniary penalty. 1 am satisfied that Mr. Robinson led Mr. Brown to belicve that the machine he was buying, or was intorested in buying, was in fact a machine that was not reconditioned, that it had been on the showroom floor of the defendant and a limited number of copies had been run off it for 22/25 ~25- showroom purposes. All relevant representations could have been made before 29 November 1977. Accordingly, I am not satisfied that it has been established that any relevant representation relating to this charge was made by the defendant to Mr. Brown. The informant relies also upon certain of Mr. Brown's evidence as to conversations between himself and Mr. Robinson when Mr. Robinson is alleged to have said that the machine would be "invoiced as new". Mr. Brown agreed that when Mr. Robinson said the machine would be invoiced to him as a new machine, it was in the context of a discussion of checking whether the investment allowance was available in respect of a machine such as Mr. Robinson had described to Mr. Brown. I am satisfied that there were no more than two such conversations, the first probably having taken place before delivery when, according to Mr. Brown, the statement of Mr. Robinson was "offered as a sales pitch". Mr. Brown agreed that the second time the relevant statement was made by Robinson was in a different context. As he put it "well just as a comment thrown in" and that it was not "as a sales pitch." I am satisifed that both of those conversations could have taken place before 29 November 1977. I am not satisfied that either conversation took place on or after 29 November. Also, the evidence as to the second conversation tae is [vague and imprecise to be a reliable foundation for a charge under the Act. It is clear that the defendant is a corporation for the purposes of s. 53 of the Act. The contrary was not - 2/26 ~26- contended. Section 53 (b) providess- "A corporation shall not, in trade or commerce, in connexion with the supply or possible supply of goods or services or in connexion with the promotion by any means of the supply or use of oods or services - (p) falsely represent that goods are new; ", It 1s not easy to define simple words of common uses; but in my opinion the word "new" where used in s. 353 (b) of the Act does nol have a fixed and inflexible meaning for the purposes of the section applying to all cases irrespective of the context in which the represcontation 1s made. I agree with St. John J. that the meaning of the word 1s a question of fact 1n each case. See T.P.C. v. Annand & Thompson Pty. Limited (1978) 19 A.L.R. 730. Depending on the context in which Lhe word appears, it may mean "not secondhand", "not old", "of recent origin", or "not excessively used". See: John McGrath Motors (Canberra) Pty. Limited v. Applebee (1963-1964) 110 C.L.R. 656; Anderson v. Scrutton (1934) S.A.S.R. 103; R. v. Ford Motor Co. Limited 1974 3 All E.R. 489; and T.P.C. v. Annand & Thompson Pty. Limited (supra). Nor does one derive any assistance as to the meaning of the word "new" in paragraph (b) of s. 53 from the other paragraphs of that section. For goods to be new they do not necessarily have to be in "maint condition" and the mere fact that goods are damaged, irrespective of the nature or quality of the repairs, does not mean that they have ceased to be new. See R. v. Ford «02/27 -27- Motor Co. Limited (supra). In some cases an article of commerce may cease to be new even if it is used for a comparatively short period: See Anderson v. Scrutton (supra) and Andrews Brothers (Bournmouth) Limited v. Singer & Co. Limited 1934 1 K.B. 17. The representation made by Mr. Robinson to Mr. Brown was that the machine had been used only for the purpose of producing a limited number of copies to prospective purchasers on the showroom floor of the defendant in Brisbane. I am satisfied that there was a representation made by the defendant through its agent Mr. Robinson that the machine was new, notwithstanding that the terms of the representation made it clear that the machine had been used un the limited sense which I have described. That use did not deprive the machine of its character or quality of being new. As I have reached the conclusion that I am not satisfied that the representations were made on or after 29 November 1977 it follows that the information fails and this charge must be dismissed. I turn to the second charge namely that the defendant contravened s. 53 (g) of the Act; namely that it made a false statement concerning the effect of a guarantee in that it made a statement to Mr. Brown that it would buy back the machine for 70% of $3,995.00 during the first year after purchase of the machine, whereas the defendant on being required by Mr. Brown to buy it back stated that it would -2+/28 -28- buy it back only for 70% of $2,500.00 (G. 26 of 1978). Section 53 (g) provides :- "A corporation shall not, in trade or commerce, in connexion with the supply or possible supply of goods or services or in connexion with the promotion by any means of the supply or use of goods or services - (g) make a false or misleading statement concerning the existence, exclusion or effect of any condition, warranty, guarantee right or remedy." I am satisfied from Mr. Brown's evidence that in one of his conversations with Mr. Robinson before the machine was delivered, Mr. Robinson said to him that the defendant guaranteed to buy the machine back for 70% of the original price of $3,995.00. For the reasons I have given in respect of the first charge I am not satisfied that any relevant representations were made by Mr. Robinson to Mr. Brown on or after 29 November 1977. However, there is a clear representation made by the defendant to Mr. Brown by the letter from the defendant, signed by Mr. Firman as Queensland manager, dated 12 December 1977 that the defendant guaranteed after one year to buy back the machine for 70% of the original purchase price of $3,995.00. There is no doubt that the defendant refused to buy back the machine for 70% of $3,995.00; but agreed to buy 1t back for 70% of $2,500.00 namely $1,750.00. The question is whether the defendant made a false or misleading statement concerning the effect of a guarantee. The informant does not put her case on any other basis. In my opinion what the letter of 12 December 1977 from the defendant to Mr. Brown describes as a guarantee 22/29 -29- that the defendant will after one year buy back the machine for 70% of the original purchase price of $3,995.00 1s a "guarantee" within the meaning of paragraph (g) of s. 53 of the Act. The defendant does not dispute that it gave the guarantee nor that it has declined to honour it. The defendant says that in all the circumstances it was only bound to buy back the machine after one year for 40% of $2,500.00 being the actual purchase price of the machine. Mr. Gleeson Q.C. senior counsel for the defendant contended that in truth the complaint of the informant 1s that the guarantee was not honoured. In my opinion this contention 1s correct. The defendant made no false or misleading statement concerning the effect of the guarantee. What it did was to decline to honour the guarantee given in the letter of 12 December 1977. For these reasons this charge fails. The third charge is that the defendant contravened s. 53 (c) of the Act by falsely representing that the machine had a benefit that it did not have in that the defendant represented to Mr. Brown that a 40% taxation investment allowance would be available to him in respect of the machine, the machine being a new machine, whereas an investment allowance pursuant to s. 82AB of the Assessment Act was never available in respect of the machine, it not being a new machine within the definition of "new" in s. 82AQ of the Assessment Act. Section 53 (c) provides:- - + -/30 -30- "A corporation shall not, in trade or commerce, in connexion with the supply or possible supply of goods or services or in connexion with the promotion by any means of the supply or use of goods or services - (c) xvrepresent that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits they do not have; " I am satisfied that Mr. Robinson told Mr. Brown during one of their conversations before the delivery of the machine that an investment allowance under the Assessment Act would be available to Mr. Brown. For the reasons I have given earlier, I am not satisfied that any such representation was made on or after 29 November 1977. However, Mr. Brown said that further representations were made by Mr. Robinson to him on a number of occasions between 29 November and 12 December 1977, the representations being that the machine would be eligible for the investment allowance of 40% if purchased in the financial year ended 30 June 1978. Mr. Brown, when asked as to when such representations weremade, said:- "On a number of dates, not in any answer to a specific query by me. I would not have ever said to Mr. Robinson - I do not recall saying to Mr. Robinson, "Will the machine be subject to the 40 percent investment allowance?" That is why I cannot recall the exact words said. Reference was always in general flow of conversation, so he would not say, "That is eligible to 40 percent investment allowance", and I would come back and say, "Are you sure it 18?", and write it down. It did not come up in that context. It was just in the flow of conversation. It was clear in the flow of conversation. The conversation could be covering a number of topics. I can say that it was mentioned, communicated to me on a number of occasions. Over what period?---Over the full time span of the ---/31 ~31- negotiations which began on the reconstructed dates, the 29th, and ends on the reconstructed dates, 12th." Notwithstanding this evidence Mr. Brown conceded that the statements by Mr. Robinson to him about the availability of the investment allowance were made in the context of the discussions about the machine being a new machine and in reference to the statements that had been made by the Berwick salesman to Mr. Brown to the effect that the machine could not be a new machine at the price of $2,500.00. In view of Mr. Brown's evidence that he could not swear that any of the conversations relating to what had been said by the Berwick salesman was after the delivery of the machine, and for the other reasons referable to those conversations mentioned by me in dealing with the first charge, I am not satisfied that any representation relevant to this charge was made after delivery of the machine. Mr. Gleeson Q.C. submitted that even if I were to find that the relevant representation had been made by Mr. Robinson to Mr. Brown after the delivery of the machine it would not be a representation that the machine hada benefit that it did not have. Mr. Gleeson contended that a false representation that the owner or lessee of a copying machine will be entitled to the benefit of an investment allowance under the Assessment Act is not a false representation within the meaning of s. 53 (c). He contended that s. 53 (c) is talking only about qualities inherent in goods themselves. An investment allowance was not intended to apply to secondhand or used plant. Section 62AA of the Assessment Act refers to new plant, and sub-section (1) defines the word 06/32 -32- "new" as meaning not having previously been used by any person, er not having been previously acquired by any person for use by that person. The machine which was supplied to Mr. Brown was not one that could qualify for an investment allowance as it had been sold previously to Bain Dawes (Qld) Pty. Limited for its use. Mr. Brown knew that the machine had un fact been used by the defendant over a short period of time whilst in its showroom in Brisbane to produce a limited number of copies for prospective purchasers. In my opinion such use would not prevent the machine from falling within the description of "new" plant for the purposes of the investment allowance provisions of the Assessment Act. In my opinion a representation that a purchaser or lessee of goods will qualify for an investment allowance in respect of goods to be supplied to him by the person making the representation is not within the purview of s. 53 (c). It is a statement that a particular fiscal advantage will accrue to a taxpayer if he acquires certain goods. It is not a representation that the goods have a benefit. For these reasons in my opinion the third charge fails. I turn to the last charge, namely that the defendant contravened s. 53 (a) of the Act by falsely representing that the machine had a particular history in that the defendant represented to Mr. Brown that the machine was not a secondhand machine, whereas it had been previously supplied by the defendant to Bain Dawes (Q1d) Pty. Limited in February 1977 and had since been regained by the defendant. 2+ -/33 -33- Section 53 (a) provides that:- "A corporation shall not, in trade or commerce, in connexion with the supply or possible supply of goods or services or in connexion with the promotion by any means of the supply or use of goods or services - (a) falsely represent that goods or services are of a particular standard, quality or grade, or that goods are of a particular style or model;" This charge is inextricably interwoven with charge G. 25 being the first charge which I dealt with earlier namely that the machine was represented as being new. For the reasons given by me in dealing with that charge I find that all relevant representations made by Mr. Robinson to Mr. Brown could have been made before 29 November 1977. Hence this charge fails. For these reasons none of the charges have been established. I order that the five informations be dismissed and that the informant pay the defendant's costs including reserved costs. | cert y that precoany p Measens fo Mr Justice Los.ta oi 1976 .