IN THE FEDERAL COURT OF AUSTRALIA) ) } } } QUEENSLAND DISTRICT REGISTRY QLD. NO. G.4 of 1981 GENERAL DIVISION IN THE MATTER OF THE TRADE PRACTICES ACT 1974 BETWEEN: ALAN ALBERT WISE Prosecutor AND: M.R.G. AUTOMOTIVE SERVICES Pry. LTD. Defendant. JUDGE MAKING ORDER: Franki J. DATE OF ORDER: Monday 17 August 1981 WHERE MADE: Brisbane ORDER THE COURT ORDERS THAT: i. The defendant be convicted of a contravention of s.53(e) of the Trade Practices Act 1974 2. The defendant pay a fine of five thousand dollars ($5,000.00) on or before 17 September 1981 to the District Registrar, Queensland. 3. The defendant pay the costs of the prosecutor. I certify that this and the preceding pages are a true copy of the Reasons for Judgment herein of his Honour : lir, Justice FRANKY G An DAL, Associate ve Dated: [1 WavET 148] (e) ... (b) ... (co) ... (ec)... (e) make a false cr misleading statement with respect te the price cf ageods or services;" ~- This charce was particularised in that the fvll price of a motor car, a Bolden Torana secan, was stated to he $1,590 whereas the full price of that vehicle wes $1,808. The Cifference hetween $1,808 and $1,590 was made up of three arounts: (a) S16 {b) $1190 if (c) S92 The false statement alleged appeared in a full page advertisement 1n a newspaper, the Gold Coast Rulletan of 24 April 1980, in which were displayed pictures of nine cars. "he car in ouestion was dGescribec near the top left haré€ corner of tke acvertisement as a "Torana LJ 2 Cocr" and as "Fitted with 2856 engine, marnuay trensmission, bucket seats, disc brekes, 12 ronths rego an@ radial tyres, finished jin two tone paint. Pull price $7,590". The price appeared in Jaree hlack figures about two thirds cf e@ centimetre in heiaht and a picture of the car was shown also in the acvertisenent. Tn the centre of the nace Cetails were set ovt of what was called the "Mike Core Customer Protection Plan". Micheel Core was the Manacing Tirector of the Cefendant which traced under the business name of FPuci Moto. The reference tc the customer pretection plan was in a rectancle about € by 14 centimetres. Tnside that rectangle in bole letterino akcut half a centimentre in heicoht appeared the words "The Mike Core CUSTOMPP PROTECTION PAN". T wil] return later to what was there said about this plen. In leroe letters on the top right hand corner cf the advertisement a reference was rade to a "3 mwronth §£,000 kim Uncendjtianel Warrenty". Ip extremely small Jetterine om the left hand side of the pace appeared the words "All specials plus on read cests" anc at the kottom of the pace ir equally srall Jetterine "These specials are available t111] close of trace 2?4.4.€0". These twe sentences were in wores of ahout one tenth of a centiretre in height. Mrs. Pide and her son Pra@ley Pidd saw the advertisemert and at ebrout 7.20 in the rwornina they went to the defendant's premises to inspect the ™orana. A salesman, Mr. Coodspeed, showed I'rs. Piee@ and her sen the Torena. I'rs. Pied's recollecticon of the ovents was that Mr. Coodepeect saie that the vehicle was a coca bhvy at the mwrice, that the price @ie rot inclrde env Cetailina whick meant the general cleaning up of the cer. After a test Arive a discussion tceok place retween Mr. Cecdspeed anc Mrs. Piee anA ber son with reaare to prace. 4, Purine this discussion an oreer form was sianed Fy Mrs. Pidd an& her son. Varicus matters were set out in the order ferm inelué@ing reference to the three amounts which T have mentioned. The amount cf $16 was not treated as relevant by the prosecrticn since it was agreed to he an amount payable as stamp duty in respect of the transfer of the vehicle. ™he amount cf £110 was shown on the order form acainst "Rocessories (Total) P.W.c. $110.00". Jt was common cround that P.W.C. stoad for road wartry certificate. The amount cf ©£°? was shown on the orceer form acainst "Telivery". On 2 May 1980 Mr. Parry Pidd ane Mrs. Picd anc Pracley Pied visiteca the Cefendant's premises and Giscussed the transaction with Mr. Ccre and Ir. tlitchel], the cCefendant's General sales manager. No objection was taken to anv relevant eviderce or the grouné that it feJl outside the particulars. ™he first matter in eyarjining whether the acvertisement was false or not is ta Cecide whether the werds in very smraj] print ""hese specials are available till cicse cf trade 24.4,°0" ane "All specials plus or road cests" are to he treated as beire relevant an testine the felsity or otherwise cf the acvertisement. The prosecution chose to charge that the advertisement was "false" end not that it was "misleading". Tt has heen the view of this Court that whether a staterent or conduct is misleading or not is te be tested by the effect of that statement er conduct upon 2 person of the class ta whom the acvertisement was directed. Fere I am concerned with the auestion of falsity. I will proceed uren the basis (without so deciding) that the test of whether a statement is false is an chijective ore. T consider that if the advertisement read, as a whole, is contrary to fact it is false within s.52(e). fee generally Civen v. C.V. Fellanc (moldings) Pty. Wte. (19°77) 29 PLT.P. 212 at p.217. 7 Po not fine it necessary te decide to whet extent the worés TI have auctee relatine to specials are relevant but JT will assume against the prosecution that full effect 1s to he aiven te then. T preceec tec consicer the arount of '$110. Tt seems rather strancee that ain the order form this amount shoulc be inclue€eé vneer the title "Accessories (Totel)" and alec in a list entitlec "Iist of accesscries to be fitted". In that list the follewire were set ovt: "Pix G@cer piller. P.WLC. Varranty". I will cersicer first the cvestion of the $110 payine recare only te the oviernce for the cefonce. A Accurert ves tonfered headed "Pecerditicnire Verksheet". Cn this srect a pumber of items were rarkee es h tine heen inspected ane certain @. others were marked as havire heen repairec or replaced. An amount of $110 was entered on that sheet against a space entitled "Total costs of repairs". Certain of the items on the worksheet would aprear te have been relevent for obtaining a road worthy certificate. Other items, for example, "heater", "plugs", ane an utem entitled "body dents" do not appear to be within the items referred to in the regulaticns unéer Inspection cf Machinery Act 1°51-1974(0) dealina with rezé worthy certificates and doe rot appear te be relevart in that regard. Uneer the vorés ""he Mike Core Custcerer Pretection Plan" in the advertisement the followince appeared: "You Puy a Mike Core use@ car with special confidence. "he Mike Gore Custcmer Protection Plar ensures that the car vou hry bas the hackine of the Fut2i Meta creenisation. Corrare whet Mike Core bas to offer and you be the judge. VOPYSFOP ™reTrp All cars are fully workshep tested anc any faults listec. Cnjy the best cars are chosen for sale. Yov can actually see a corplete written report on the car you choose. WOPKSECP RPCONPT™TONTNC Any Cefectave perts that are discevered in a Mike Core used car are replaced or recen@itionee before delivery. The vorkshap report lists any such werk ané bow ruck a3t has coast. Pov with confidence et Mike Core's Futi Moto." Tt Js clear thet this custemer protectien plan previdec for atl cars te he fvily tested enc eny Cefective parts te he replaced or recorditioned Fefore Celivery. The advertisenent stated that the workshop report would show how much the werk suoted "has" cost. Mr. Core's eviderce wes that this workshcp reconéitionine was never Cone until after a sale hae been neqotisted where the hvyer was a Queensland resident. Assuming in faveur of the Gefendant that the wore "has" is to he replaced hy the word "will", the customer pretectior Plan clearly promised that al] defective parts would be repleced or reconditioenec hefore Celivery. No reacer cculd reasonably Craw frem what is sai@ ip the a€vertisement ahout this plan thet he woule have to pay for the replacing or reconditioning of any Cefective parts. Mr. Gore accepted in his evidence that customers were rot expected toe pay for the cvstorer protectier Plan, they received it as e henefit an@ it was aurcludee¢ an the rrice of the vehicle. On this Fasis T cennet see hew it could be said that a majority, or indeed any, of the items shown in the reconditioning worksheet and which had to he replecec or recenditianed to cktain a road worthy certificate covld fall cutside defective perts which, under the cvstorer protecticn plan, were to ke replacee@ or recereitioned before delivery hy the Gofendant withevt ccest te tke purchaser. Cn this basis JT canrot see hew any of the items, or at Jeast any items of anv conseavence set out in the recorcitioring verksheet, coulc he sai@ to ke on roa€ costs as Cescrihed ir the adcvertisement. Peceause of what 3s seic an relation tea The Mike Cere Custerer Protection Plan tke worés "cr roae costs" ir the aevertisement e, rust he reac as exclvueCinag any costs in relation te replacine or reconditioning of any defective parts. I am therefore satisfied that the advertisement was false hecause it set ovt that the full price for the Torana was $1,590. There is also the reference in the acvertiserent in reletion to the Torara te "]? wonths reco". This must be added to what T have already said end seems to Fe a further representation that the price of $1,590 1s for a car ina cerdition fit for registration. The use of the worés "Full Price" alse suprerts the conclusicn which T have reacheé. I proceed next te consider the amount cf S9?, Tn view of the conclusions to which T have core in relatior te the ficvre ef $110 it is not strictly necessary te censidcer the rpesition with regard to tre ficure of £9?, JT have reecheC@ tre eecisicr an relation to the figure of °1]0 witreut havina te consifer the seas erc@ibility of any witness. There is evidence that the cCefendant was prepared to Celiver the cer te the purcheser without any "deteiline" work heira Gene. Mr. Core, on behalf of tre Cefencant, in written ansyvers to certain qvestions suhmitted te the defeneart hy the Trace Practices Cormission said thet the $99 was fer "Tetailirae charees, @ tank of petrol". Tn evidence he saic that on 2? May 1°°0 Fe tole Mr. ane Mrs. Pide that the fee cf £9? set out aceinst "Pelivery" was "er fee charceed te present the caer air a 9. hetter coneiticn to the custorer than the way ir which it was Gisplayed in the used car yare". In evidence he said that the Cetailing was subcontracte@ to a cerpany callee "Ming" which charged "a fixed fee for the e@etailina of care, depending cn their size". Mr. Gecdspeed said in evidence that the cost of detailind anc petrol was always $92 irrespective of the size of the vehicle. Mr. Goodspeed also said that at the time when the order was signed he pointed to the fioure of $92 on the order form and seid that it was "for the Cetailed clearing of tke vehicle, steam cleanine of the encine and petrol". Mrs. Pidé said in evidence that wher delivery was taken of the car it was in the seme condition in relaticn to clearliress as when she pad first inspected it. Mo evicence was giver by the defer€ant thet ary detajiline work was in fact carriec out cn the car ard tte incensistencies between Mr. Core ané Mr. Coc€speec about the basis of charces by Ming ané the reference to steam cleanino cest dourt on their evidence. Mrs. Pidé saiA that in tke conversation cF 24 April 19°C Mr. Gecodspeec had saic that the $92 was in w respect cf "a warranty cuarentee", "to uphold the warranty" for "an urconditiona] guarantee". She sai@ sbke covle net remerber the exact wores. Mr Pidd's evicence was not very satisfactory on tris aspect. Fe said that Mr. Gore said that the $92 was an averace "computer assossee cest in relation te bew ruch it vould cost toa qet every cer ready to put on the showrocm ficor". Jater he sai@ Mr. Core related it ta cover the three renth S007 mile unconeiticnal warranty. Me alse censideree that Mr. Core had said the $9? was for a Celiverv fee. 10. There is no Coubt that if the $99 was an optional] charce ir respect of detailine an@ cleanina up the car end providing petrol its ad@iticn te the figure of $1,590 woule not he relevant in @Geci@€ing whether the ecvertisement was false. I recard the evidence in relation tc the amount of $9? as unsatisfactory. Meither Mr. Rradley Pidd nor Mr. Mitchell were called. Mr. Parry Pidéd's evidence on this aspect was unreliable a and Mrs. Pidd could not remember exactly what was said althouch, in qeneral, I recard her ag a reliakle witness. Hevever, Mr. Core and Mr. Goodsree€ gave evicence which vas unattractive on this qauesticn. T do rot reaard either of them ac reliable witnesses. I consider that the prosecvtion has net established that part cf its case which depends cn the charae of $92 Fut it has established that part whach Cepencs cr the charae of $1]Q. T am satisfied the cherce that the statement as to price in the advertisement was false has heen prevee keyond reasonable deubt. "he Cefendant will be convicted and the hearinc adctourneé to Prishane or Mer@aey 17 fucust 198] at 11.15 am. when any subrissicns concerning eny fine and costs ray he made. LT eertify that this and the preceding pages are & true copy of the Reasons for Judgment herein of his Honour Mr. Justice FRANKI GUA WADA, Associate Dated: 10 [3 {81