IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION BETWEEN : AND: ORDERS CORAM: WILCOX J DATE: 28 SEPTEMBER 1984 PLACE: SYDNEY 1. Judaement for the thousand two hundred and 2. Order that the costs of the proceedings. 3. Direct that the apolicant ~wreer er No. G.8 of 1984 LINDA MARTIN Applicant in the sum of Ten fiftv dollars ($10.250.00). respondent pav to the applicant her exhibits be returned if no appeal is filed within 21 davs of this date. CARRIAGES PTY v IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION BETWEEN : AND: wee wr No. G.8 of 1984 LINDA MARTIN Applicant HORSELESS CARRIAGES PTY ORDERS CORAM: WILCOX J DATE: 28 SEPTEMBER 1984 PLACE: SYDNEY 1. Judaement for the thousand two hundred and 2. Order that the costs of the proceedings. 3. Direct that the respondent filed within 21 davs of this date. apelicant fiftv dollars pav to the LIMITED in the sum of Ten ($10,250.00). applicant her exhibits be returned if no appeal is ww IN_THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISTON No. G.8 of 1984 -_w~- H+ BETWEEN : LINDA MARTIN Applicant AND: HORSELESS CARRIAGES PTY LIMITED Respondent REASONS FOR JUDGMENT CORAM WILCOX J DATE: 28 SEPTEMBER 1984 PLACE SYDNEY | This case. which arises under the Trade Practices Act 1974 and the law of contract. concerns the consignment for sale of a motor car. rare in Australia: a 1979 Chevrolet Corvette Stinarav. The applicant, Linda Martin. 1s an American who married a member of the Australian Navv and came to live in Australia in May 1982. She brought with her the vehicle and had it converted to riaht hand drive and reqistered in Australia. In Januarv 1983 Mrs Martin decided to sell the car. Her husband. Michael Martin. was about to leave for overseas naval dutv and she proposed to visit her parents in America during his absence. Mr Michael Martin called into the premises of the respondent. a companv which operated a used car sales vard in Parramatta Road. Concord. which vard specialised in unusual and expensive motor cars. Particularlv sports cars. Mr Martin showed a photograph of the car to Mr David Grav. the Sales Manaaer,. and to Mr Ronald Hunter. Manaqindg Director of the respondent. The two men asked Mr Martin to bring in the vehicle. At that time the car was coloured blue. the paintwork being sliahtly faded and with a few small marks. especially on the nose. Mechanically. it wags in aood condition. It was reaistered until 16 Julv. 1983. On + February 1983 Mr and Mrs Martin returned to the vard with the vehicle. Thev saw Mr Grav who called Mr Hunter to inspect the vehicle with him. The evidence 1s not completely clear but it would appear that Mr Hunter left Mr Grav to nevotiate with Mr and Mrs Martin. Mr and Mrs Martin indicated that thev wished to obtain $25.000 for the vehicle and Mr Grav was not wrepared to make anv offer at that wrice. He did. however, suagest that the car should be left on consianment at the vard, that 1s the vard would attempt to sell the car on their behalf so as to return to them $25.000. According to Mr Martin, Mr Grav said that this was a "quite reasonable" price to seek. He indicated that 1t would be desirable for <tertain minor work to be done to improve the oresentation of the car and also said that. if the car did not sell within three weeks. 1t wouid be desirable to discuss the possibility of respravina the car because. "a lot of people who would want to put that amount of monev, $25.000, into a car. thev want a car to stand out and look flashy from the rest of the cars around the place". There was no discussion as to what would happen if the car was not sold or if Mr and Mrs Martin did not agree to a resprav. The car was left at the vard on that dav. Mr Grav wrote out. sianed and handed to Mrs Martin a receipt for the car which included the followina: "Horseless Carriages Ptv Limited Parramatta Road. Concord Acceot this vehicie on consianment at a nett fiaqure of $25.000 upon the sale of said vehicle the above cov also aarees to repair paint faults. the front nose ar4 parel, repair damaged front seat, detail vehicle readv for sale at no cost to Mrs Martin". 'Mr Grav s emphasis) Mr Martin sailed from Svdnev during late Februarv or the first two davs of March. The applicant had left Australia for America about one week earlier. She had left with her father-in-law, Mr John Martin. her Power of Attorney to deal with the sale of the car during her absence. During the period between 4 Februarv and his departure. Mr Martin passed the vard veqularlv each dav in travelling to Garden Island but, he savs. he did not see the car in the vard at all. On two occasions he called into the vard and was told that the car was not in the vard because of interest by a Mr Lord. who was endeavouring to arrange the necessary finance and insurance. Mr Michael Martin's ship sailed from Svdnev to Melbourne. Whilst he was in Melbourne he had a telephone conversation with his father in relation to the car. resulting from a telephone conversation between Mr Grav and Mr Martin Snr. Mr Grav had informed Mr Martin Snr that the prospective sale had fallen throuch and had expressed the opinion that it would be desirable to have a colour change. Mr Martin had asked how much this would cost and Mr Grav had replied that the overall cost would be $1,500 of which Mrs Martin would be required to pav half According to Mr Martin Snr. Mr Gray added "the boss will pav the other half. because he 1s still interested in buving the car". Mr Martin Sne indicated that he wished to consult his son and Mr Grav asked that Mr Martin Jnr telephone him to discuss the matter. Mr Michael Martin telephoned Mr Grav from Melbourne. He qaave evidence. and this is not disputed. that Mr Grav quoted the total cost of repainting as being $1,500, of which Mrs Martin would be expected to pav half. Accordina to Mr Michael Martin, Mr Grav indicated that the other half would be borne bv the companv because Mr Hunter wanted to purchase the car. He savs that he asked why it was that, if Mr Hunter wanted to change the colour of the car. his wife was expnected to vav for it and Mr Grav replied that thev "cannot have everything our own wav". Mr Grav savs that he told Mr Michael Martin "that a change of colour would aqive it a better chance of sellina". He denies savina to either Mr Martin Snr or to Mr Martin Jnr that Mr Hunter was interested in purchasing the car for $25.000 and Mr Hunter has aiven evidence that at no time was he interested in Ppurchasina the car otherwise that "at a wholesale price": a price which I infer to be well below $25.000. Following the telephone conversation between Mr Grav and Mr Michael Martin the car was respraved. red with a black stripe. The actual cost incurred. accordina to Mr Hunter but for reasons not explained. was $1,800, not $1,500. The vehicle was then put on displav. Mr Martin Snr called into the vard shortly after the resprav to arrange for a whotoaraph of the car to be taken. He thought that the vehicle would be sold before his son and daudqhter-in-law returned and he wished them to see the avpearance of the car after the respray. Thereafter. and before the return to Australia of his son and dauaqhter-in-law he. according to his evidence, telephoned the vard on a number of occasions to enauire as to the position. At one stage he was told that there was a person interested but that fell through. On manv occasions. according to his evidence. he asked for Mr Grav and was told that he was unavailable and Mr Grav did not return his call. Mrs Martin returned to Australia on 15 June. her husband on 20 June. She met him at the dock and. on their wav home. thev called into the sales vard. Thev asked for Mr Crav but he was unavailable and thev had a conversation with Mr Hunter. Mr Grav 1oining them after a short time. The car was on displav in the vard. Mr Hunter told them that it had not been sold. Accordina to him. Mr Michael Martin asked Mr Hunter "how come (he) had not bought the car like he said he was qoina to do?" and Mr Hunter said that he never had anv intention of buvina the car. Mr Hunter said that they might need to think about a more realistic price. Mr and Mrs Martin asked him how much thev owed him if thev took the vehicle out of the vard and he replied $3.000. a sum which he claimed to have spent on the car. At the time Mr Hunter had a paper in his hand with items of expenditure and this document 1s, presumably, the stock card which was subsequently tendered before me (Ex 8). This document details the followind work: "Betail $100 Tune service 187 Trim repairs 112 Demist air cond service 97 Paint ... 1,800 Brakes. disc.nh-brake 142 Detail 100 Pin stripve B4 Paint ... cracks 400" The total of these items 18 $3.022. The item for painting, $1.800, was the item discussed between Mr Grav and Mr Michael Martin. There had been no discussion about the brakes ($142) or air-conditioning ($97). The remaining items, Mr Hunter conceded. were covered bv the terms of the original aaqreement. Mr and Mrs Martin disputed their liabilitv to pav more than $750. one half the quoted cost of the resprav. but Mr Hunter insisted that they should pav $3,000 it thev wished to remove the car. Mr Hunter was asked about this attitude: "0d So that when vou asked for $3,000, vou in fact were askina for more than vou were entitled to? A I would not sav I was asking for more than I was entitled to. I did mv best to sell that car. is) But vou had aqreed to bear those costs vourseif. it 1s in effect a business took? risk vou A I did ask for $3,000. ves. 0 You had previously told us vou aareed to bear the cost of the matters stated in the consianment notice? A Yes. ie) So vou took that risk? A Yes. fe) So vou tried to aet more monev but vou did not aet 1t? A Yes." Mr Hunter claims. and Mr Martin denics. that during this conversation Mr Hunter offered to purchase the car for $20.000, from which would be deducted the $3,000 claimed bv Mr Hunter. I am not satisfied that there was anv such offer made. In the event. Mr and Mrs Martin decided to leave the car at the vard in the hope that a buver would appear. Thev indicated that thev would be prepared to lower their price to $23.000. However. no sale eventuated. Mr Martin souaht advice from various oraanisations as to his position and was told that there was nothing he could do about it. He therefore obtained $3.000 in cash and returned to the vard with the applicant on 11 July 1983. with the intention of attempting bv negotiation to reduce the amount which he had to pav to obtain release of the vehicle. There was a discussion with Mr Hunter durina the course of which Mr Hunter. on his own admission. became heat=i and threatened to break the windows of the car and kick in the door panels. In the end, Mr and Mrs Martin aqreed to pav $2,000. Mr Martin was cross-examined as to their reason for this aqreement. "0 You did have $3,000 in vour pocket if all failed? A Yes. ie) Your obiect was to trv and knock it down on that fidure? A Yes. QO And vou achieved 1t? A Yes. Q You know all the time he had been savina: 'I have spent $3.000 on the car'. A Yes. 0 You know that he also had a piece of paper on which he was saving: 'It is written dow here'? A I did not ask him. The main reason we said we would aive him §2.000 was because of this supposed paint iob he had done for us. that we had said ves for the cost of $1,800 and I was not aoing to pav for anv of the supposed mechanical repairs that he had done without mv consent. That was whv I would not go anv higher than $2,000. 0 That 15 not right. You were prepared if all else failed to hand over $3,000 on 11 Julv if vou could not neqotiate a lower price because vou had that monev with vou for that purpose. A That was mv car, our car. sitting in somebodv's car sales vard and I wanted it. ie) All I am saving without anv criticism is that vou were prepared if vou could not negotiate a lower figure to pav over the $2,900 for the purpose of recoverv? A No. I was not prepared to pav out, I onlv had $3,000 which we had alreadv ---- 0 When I sav 'nav over $3,000' I meant 'hand over $3,000°. A Yes. 0) But vou were prepared to do that if all else failed? A Yes." Mr and Mrs Martin handed over $2,000 in cash and Mr Hunter then gave to them a receipt for that monev showina the pavment was being for "repairs, Painting etc to above Chevrolet car. paid in full $2.000. balance nil". According to both Mr and Mrs Martin. the electrical svstem in the car was not workina when thev took deliverv of it. However this was easilv fixed without expense to them. More importantlv. thev noticed defects in the paint work. Thev drove 10. the car home to Penrith and, within two or three davs, took it to a local workshop, Don Pellatt Renpairs. The vehicle was examined pv Mr Sterphen Tribe. a aualified motor mechanic who has had considerable experience in supervising repairs, includina bodv repairs to vehicies. Mr Tribe aave evidence that uvon inspection he found that the vehicle had been repainted from its oriqinal colour. He described the paint iob as being "less than the standard vou would expect for a vehicle of that tvpe". He said that the vehicle had not been completely stripped of its exterior hardware and rubbers to be painted so that there was a lot of oversprav on rubbers and the paint work showed sians of blisterina or pimples. There was evidence of the old blue colour underneath the door rubbers and around the bonnet and other openings. The applicant said in evidence that she and her husband did not have the monev to carrv out repairs. Even prior to reaainina possession of the vehicle. Mr Martin had taken steps to find a buver. He put notices up at Garden Island. where he was then stationed. and arranged for friends to put up notices in other depots. After he obtained the release of the car he advertised its avallabilitv for sale in the "Daily Telearaph" and he made enquiries through a friend. who ran a tvre business at Penrith and who was in contact with motor dealers. He contacted some dealers whose names were suaqested bv this friend. ll. As a result of this activitv a motor vehicle dealer. Mr Ken Greaves, came to see the car. Mr Greaves closelv inspected the car. He said in evidence that he noticed some blisters in the duco mainlv in the red paint on the top of the bonnet. the top of the mud guards and the boot. He said that. in addition. there were a couple of places where the resprav had missed and where he could see the blue colour. The defects were not obvious from a distance but were obvious on close inspection and thev influenced him as to the price which he was willing to offer for the car. Mr Martin offered to accept $20,000 but Mc Greaves said that this was too high. He undertook to make some enauiries and eventuallv offered $16,000 which was accepted and paid on 18 Julv, two davs after the reqistration had expired. In cross-examination Mr Martin aqave this evidence: "Oo You knew vou were not qettina the best price that vou miqht achieve if vou hung on a bit? A Yes, that is right. sir. ie) Because of the delavs which have occurred vou wanted to s2ll this car and realise the monev vou needed? A Evervtime we kept it. 1t was costina us more monev. Reaistration was iust about due: insurance was due: we got a letter from the insurance companv savina thev would not cover 1t anv more. That was the cheapest one around Svdnev we could find to do it. So evervtime we kept it. it was qoina to cost us more monev and we did not have the monev. as I said before." 12. Mr Greaves decided to keep the vehicle for his ow use, at least for the moment. He put a new exhaust svstem on the vehicle, at a cost of about $200. and purchased American stvle magnesium wheels which. with tvres. cost about $1.200. He renewed the reaistration and he buffed out some of the paint blisters. This did not eliminate all the paint defects. Mr Greaves thouaqht that the onlv wav to do this would have been to resprav the vehicle aaain. Mr Greaves was in Canberra in Auqust 1973 and visited the premises of Turin Motors. a business conducted bv Mr Brian Hall. Mr Hall saw the Chevrolet Corvette and uraed Mr Greaves to sell 1t to him. Mr Greaves did so at a pric? of $20.500. Mr Hall's evidence was that when he purchased the car it had no paint bubbles. that there was no mis-matching of paint and that 1t was not possible to see blue paint under the rubbers. Notwithstanding this. he maintained that he could tell that the colour had been chanaged. Despite several attempts he did not succeed in explaining how he had achieved that feat. I found his evidence unsatisfactory and. in relation to the condition of the vehicle. I prefer the evidence of Mr Tribe and Mr Greaves both of whom impressed me with their carefulness of observation and evidence. 13. Mr Hall kept the car. as his own vehicle. for some months. In March 1984 he displaved the car at the Canberra Motor Show. with the result that it was sold to a private purchaser for $25,000. Counsel for the applicant relies upon s3s.52 and 53(e) and (f) of the Trade Practices Act. 1974. He savs that. in relation to each of three matters, the respondent enaaged in misleading or deceptive conduct, in breach of s.52, and made false or misleading statements with respect to the price of and need for aqoods or services. Alternativelv, he alleé-~.3s breach of contract. The first of the three matters relates to the representations made bv Mr Grav. on behalf of the respondent, when the car was taken on consianment. The representation. counsel araues was that the repairs contemplated bv the consianment would be at no cost to the applicant whereas. in the event, the respondent demanded monev from the applicant in relation to those repairs as a condition to re-deliverinag the vehicle to the applicant. Secondlv. it is said, that the conduct of the respondent offended against ss.52 and 53 of the Trade Practices Act, and constituted breach of contract, because it was aaqreed between Mr Grav, on behalf of the respondent, and Mr Michael Martin. on behalf of the applicant. that the rerainting would be carried out on the basis that onlv $750 would be demanded from the applicant as her share of the cost of that 14. repainting whereas. in the event. a claim was made which included a fiqure of $1.800 for repainting. Thirdly. it is said, there contract in that Mr Grav represented to Mr Michael Martin that repaintina would result in a purchase bv Mr Hunter of the car or. alternativelv,. would enhance the prospects of the sale of the car. The first two matters can be considered together. The essence of these claims is that the arranaement between the parties was such that the total sum pavable bv the applicant in respect of work done to the vehicle whilst it was in the possession of the respondent was $750. Mr Hunter demanded $3,000, received $2,000 and. so the arqument runs. the applicant is entitled to recover the difference between the amount paid and the amount which was properlv pavable, that is $1,250. Counsel for the respondent does not contest that the conduct complained of in respect of these two items is capable of amounting to conduct in breach of ss.52 and 53 of the Trade Practices Act and of being a breach of contract. I think that this tacit concession was correctlv made. It is. no doubt. correct to sav that the making of a promise in trade or commerce which is not subsequently honoured mav not. bv itelf, constitute misleading or deceptive conduct: see Bill Acceptance Corporation Ltd v GWA Limited (1983) 50 ALR 242. But. upon the applicant's case, the respondent did more than promise that no charae would 15. be made for the initial work and that the charae for the repainting would be confined to $750. Throuagh Mr Hunter. 1t asserted an entitlement to retain possession of the car. in effect a lien. until $3,000. later $2.000., was paid to it. An uniustified insistence bv the respondent upon a claim for possession, in derogation of the applicant's right. can properlv be described as misleading conduct 1n the course of its trade as a motor dealer. Upon the aprplicant's case it was also in breach of the two contracts made bv Mr Grav, on 4 February and in the Melbourne telephone conversation respectivelv. Counsel for the respondent arques. however. that the applicant's case should be reiected for two reasons. The first of these. which qoes onlv to the discussion of 4 Februarv. 1s that. upon 1ts proper construction. the consianment note provided for the work to be done at no cost to Mrs Martin 1f, but onlv if, the car was sold by the respondent. He arques that 1t is implied in the consianment note that Mrs Martin will be responsible for anv expenditure in fact incurred by the respondent in relation to the work there contemplated in the event of the vehicle not beind solid. Secondiv. he savs, there was in anv event a negotiated settlement of the claim for expenses. in the sum of $2,000. s0 that the applicant is precluded from seeking to recover the monevs which she has paid. I have set out above the relevant terms of the consianment note. The obliaation bv the respondent to carry out the itemized work is an obliaation "at no cost to Mrs Martin". 16. There is nothing in the consianment note to suaqest that, in the event that the vehicle is not sold. Mrs Martin will be liable to pav to the respondent the cost of carrvinag out the work. Counsel for the respondent suaqests that there should be such an implication because, as the applicant would realise. 1t would be inconceivable that the respondent would aaqree to carrv out work on a vehicle for which 1t would not be reimbursed either bv makina a profit on the sale or bv pavment in the event of the car not being sold. I do not accept this submission. Mr Hall. who has been in the motor business for 17 vears and who has conducted Turin Motors. a second hand motor business specializina in high performance cars. for 6 vears aqave evidence of the drawing power of a Chevrolet Corvette car: "Thev are a qood car and vou put them on the front line of vour car vard and thev sell other cars. Thev are a difficult car to sell but thev look fantastic. [e) Thev are a draw card? Thev are a draw card. Thev aet people to come in? Verv riaght. You are aqlad to have one in vour vard? Yes I am. Even though it mav take a lona time to sell? r oC Fr O Pp oO YS Yes." 17. There were two advantages to the respondent in takina the applicant's car on consianment. The first advantage was that spoken to bv Mr Hall. namelv that the vehicle would act as a draw card to induce people to visit the vard. Thev mav not ultimatelv be interested in purchasing the Chevrolet Corvette but mav become interested in purchasing some other vehicle which is available for sale. The second advantage, of course, is the chance of the respondent makina a sale of the vehicle at a price which vields to 1t a profit, after paving out the applicant her $25.000, without incurring the risk. or holding charages. involved in the vurchase of the vehicle. The work oriqinallv done. after deliverv of the vehicle on consianment. apparentlv consisted of the first three items in Mr Hunter's stock curd to a total cost of $399. This work was directlv related to improving the presentation of the vehicle and was the work which the parties contemplated would be done at no cost. Mr Hunter conceded that he did not expect to be reimbursed for these items: "9 And were vou aware that Mr Grav had made certain aqreements with Mrs Martin and Mr Martin about the work to be done to his car? A Yes. fe) Could the witness be shown this? Had vou in fact seen a copv of this consianment note? A Yes I have. ie) You were aware. were vou not. that that work was to be done at no cost to Mrs Martin? A Yes. ie) And in fact the cost was to be borne bv vourself? 18. A That is richt. ie) And the costs of so doing, of carrvindg out that work, were in fact entered bv vou onto the stock card, were thev not? A Yes. ie) It was not something vou expected the Martins to pav? A No." The same situation applies to the cost of the paintinda, over and above the $/50 which Mr Martin aqreéed to ray. Mr Grav. in his evidence. agreed that he had told Mr Martin that the total cost would be $1.500 of which Mrs Martin would be required to pav $750. Nothina was said about the possibility of the balance being borne by Mrs Martin in the event that the car was not sold. Once aqain. I think that there was an obvious motive for the respondent to be prepared to accept part of the expense of the repaint. The vehicle. newlv renainted in red with black stripes, would be much more "flashv" than before and consequentlv a better drawcard. Furthermore, both Mr Hunter and Mr Grav appear aenuinely to have held the opinion that repaintina would improve the chances of re-sale. In these circumstances [ do not think that it would be correct to implv into the aqreement between Mr Grav and Mr Martin anv term that in the event of the vehicle not being sold then the whole cost of the repainting should be met bv Mrs Martin. 19. In relation to the second submission for the respondent. it ig I think necessarv onlv to bear in mind the circumstances of the pavment of the sum of §2,000. At the first discussion between Mr and Mrs Martin and Mr Hunter, after their return from overseas, Mr Hunter had indicated that he required to be paid $3,000 before he would release the vehicle. Mr Martin was unhappy about this and soudht advice but took the view that it was essential for him to obtain possession of the vehicle and that he would have to pav whatever was necessarv to achieve this purpose. The discussion on the second occasion can hardlv be reaarded as a .air and equal neqotiation between the parties for a resolution of their differences. Mr Hunter was 1n the position of controlling the possession of the vehicle: unless Mr and Mrs Martin aareed to his demands then thev would not obtain possession of the car and would not have anv opportunity of sellina the vehicle for themselves. Thev were in debt and could not afford to renew the reaistration and insurance. Thev vielded to duress. Both the submissions put bv the respondent in respect of the claim for repavment of the sum of $1,250 should be reiected. The third claim of the applicant 1s for recoverv of the sum of $9.000. being the difference between the sum of $25.000 at which the car was delivered on consianment to the respondent and the ultimate sale price of $16.000. The applicant arques that the respondent. throuah Mr Grav. engaged in deceptive or 20, misleading conduct and made false statements in representing to the applicant, through her husband. that if the car was repainted then Mr Hunter would purchase the vehicle. Alternatively, she araues that. even if there was no specific representation that Mr Hunter would purchase the vehicle for $25,000. the respondent enaaqged in misleading conduct in representing to the applicant that a resprav at a cost of about $1,500. would improve the prospects of the sale of the vehicle. Mr Grav denies that he told Mr Martin that Mr Hunter was interested 1n purchasing the car. Counsel for the respondent has submitted that it 1s unlikelv that anv such statement would be made. that Mr Hunter had previouslv declined the opportunity of purchasing the car and that. if he did wish to purchase it, 1t would be more likely that he would purchase it and then repaint to the colour of his own choice. Furthermore, the comment is made that the subseauent conduct of the Martins was inconsistent with a belief by Mr Michael Martin that. he having assented to the repainting, the car would definitelv be purchased bv Mr Hunter. There is force in the submission put on behalf of the respondent that if Mr Hunter had desired to purchase the car then he could have done so at anv time. without raising the matter of revainting. Mr Martin said that, in the telephone conversation with Mr Gray. he asked whv it was that if Mr Hunter wanted the colour of the car changed he and his wife had to pav for it and 21. Mr Gray said that they could not have evervthing their own wav. It was put to him that he could have suagested a reduction of the price to allow for the cost of the resprav but he said that he did not think of that. That he did not do so mav seem stranae but I accept Mr Martin's evidence to that effect. He is not an experienced businessman. Mr Michael Martin was cross-examined as to his subseauent conduct in an attempt to show that it was inconsistent with a belief bv him that there had been a definite arrangement for sale: "O Was it vour expectation at the end of that telephone call that what was qoinag to happen was this: the car was qoinag to be respraved red, or respraved another colour, and thereupon Mr Hunter was agoina to buv the car himself. Was that trulv vour expectation at the end of this phone call? A The whole trip that I did. I kept in the back of mv mind that when I qot back home this car would be sold for us. 0 I suppose vou had an idea how lond the repaintina miaht take? A No. Q You would have expected that to be done fairlv quicklv? A Yes, especiallv if the owner of the place wanted to buv the car and wanted it respraved. 0 That would be done within a week or two? A Yes, I would imaqine. ie) So at the end of March there would be no inhibition about vou aetting vour monev, would there. accordina to vour expectations? Q 22. I would sav ves, that is riqht. The fact is that it was not until June when vou returned that vou made anv attempt to raise this question of the promise that had been made on behalf of Mr Hunter to purchase the car? What else could I have done. I was out of the countrv. But vou had nominated vour father on the spot to deal with this matter? He had tried on numerous occasions to contact Mr Grav and everv time he rang up Mr Grav was out of the office. attendina an accident across the road or in the car sales vard with somebodv, and Mr Grav never once rana mv father back and he was supposed to be our Power of Attornev. That is what vour father told vou? Yes. Did he report to vou during the time between March and June whilst vou were awav? Yes. because I kept asking how the car was qaoinag. He said, I have not heard: thev are not answering mv phone calls when I am rinainda them. But vou had an expectation. did vou not. bv the end of March vou would be getting vour monev from Mr Hunter? I did not know how lona the monev would take to come through. All I knew was Mr Hunter through Mr Grav had promised to buv the car." 23. This attitude of mind is consistent with the evidence aiven by Mr Martin, corroborated by his wife in cross-examination and not denied by Mr Hunter. that when he went to the vard on the first occasion after his return to Australia he asked "how come Mr Hunter had not bought the car like he said he was qoindg to do". I was impressed with all of the Martins. as witnesses. I felt that in each case the witness was honest and careful, endeavouring to recall the sequence of events as accuratelv as possible. I have no doubt that Mr Michael Martin is under the sincere belief that he was assured bv Mr Grav that if he aareed to the repaintina then Mr Hunter would purchase the car. It is conceivable that Mr Michael Martin was honestlv mistaken as to what Mr Grav had said. However, the account of the conversation which he aqives 1s supported bv his father's evidence of his own conversation with Mr Grav shortlv before that date. During that conversation, according to Mr Martin Snr. Mr Grav said "the boss will pav the other half. because he 15 still unterested in buvina the car". I have difficultv in seeinag whv this comment would have been made if. as Mr Grav asserts. Mr Hunter had never had anv intention of purchasina the car or acting other than as consianee in an attempt to find a purchaser. I accept that, in fact. Mr Hunter had no intention of purchasina the car at a retail price but I think that somethindg was said bv Mr Grav to both Mr Martin Snr and Mr Martin Jnr about Mr Hunter 24. purchasina the car. Even 1f this was not a firm promise, as Mr Martin Jnr believed. but merelv an indication of a likelv event the availability of a claim under s.52 of the Act would not be affected. If. in fact. Mr Hunter had no intention of. and was not interested in. buvina the car then Mr Gray enaaqed in misleading conduct in intimatinag to either of the Martins either intention or interest. cf. Gardiner v Suttons Motors (Homebush) Pty Limited (1948) 48 ALR 142 at p 153. I think that Mr Grav, and no doubt Mr Hunter. was keen to procure the consent of Mr Martin Jnr to a resprav and that he threw in the reference to Mr Hunter in order to obtain that consent. Even if no specific reference was made to Mr Hunter it was misleading conduct to aive Mr Martin Jnr to understand that the contemplated repaint would improve the prospects of sale. Evidence was aqiven bv a number of the witnesses about the relationship between the price charged for a resprav and the aualitv of the 10b which was likelv to result. It was common around that a cheap resprav would be likelv adverselv to affect the value of the vehicle. Mr Tribe. asked the correct procedure for repainting a vehicle a different colour. replied: "It devends on the specific vehicle. because obviouslv there are horses for courses. and if vou are onlv chanaing the colour of a cheap vehicle. you do it in the cheapest possible wavy. If vou are going to repaint an expensive vehicle and maintain its value. vou are agoing to do a special iob to make sure vou get it riqht". He went on to categorize a four vear old Chevrolet Corvette as 25. being an expensive vehicle. and to explain that. in relation to such a vehicle it would be necessarv, in chanaina colour. to do it in such a wav as to make it appear that "The vehicle was meant to be that wav. So in order to do that, the wav vou do it is to remove anv part of the vehicle which would normallv be put over the top of your paint coat such as window rubbers and door rubbers and thinas of that nature which are qoing to qive awav straiaght awav the fact the vehicle has had a colour change. That will also aqive vou a chance to have an edge to vour paint which will not lift, cannot qet the weather under it. Preparation can qo right to the edge of the vehicle rather than the edae of the rubber". Mr Greaves expressed the view that it made a bia difference to a car whether its colour had been obviously changed. He described the Chevrolet Corvette Stinagrav as somethina of a specialist car. fairlv rare in Australia and. to some extent, a collector's item. He said that 1f one was qoind to resprav such a car "this should be done in such a wav as not to show that it had been respraved". Asked to qive detail about how this was to be done he npcinted out that what is done "depends on how much vou are pavina for a job. because the time involved for a car limits the amount of monev spent". Mr Greaves did not have anv extensive experience in relation to resprav costs but 26. aave a range of $1,800 to $2,500 as "the price which vou would pav to have that sort of car spraved I quess". Mr Hall araued that "the aqualitv of the paintwork is verv important to the value of the car". The decision to resprav. the selection of a price for the respraying and the acceptance of the eventual iob were all matters undertaken bv the respondent. Mr Grav acknowledded in his evidence that he realised that Mr Martin Jnr relied on his exvertise and left it to him to choose the method of respravina. Both Mr Hunter and Mr Grav accepted the iob done bv the sprav painter. Presumablv, 1t accorded with the quotation which thev had accepted and their expectation as to aualitv. Although the evidence is rather sparse, there is some indication that a respray at a quoted price of $1,500, or an actual price of $1.800, would not be likelv to achieve the standard which, in the opinion of both Mr Tribe and Mr Greaves, was essential in order to maintain the value of a car such as the Chevrolet Corvette. In the circumstances of that particular car. and a proiected colour change, it was a misrepresentation - although an innocent misrepresentation - of the position to suqqest that the value would be maintained, and the prospects of sale enhanced. bv a resprav at the envisaged price. Such a statement would probably have been true in relation to a more expensive resprav, carried out in accordance with the method advocated by Mr Tribe and Mr Greaves, but it was not true of the standard of respray contemplated by the respondent. Therefore. whether or not there 27. was anv holdina out of Mr Hunter as a purchaser. the recommendation made by Mr Grav amounted to misleading conduct. In these circumstances. I do not find it necessarv to consider whether the respondent is liable to the applicant in contract. I hold that the applicant is entitled to recover, under 3.82 of the Act. the loss sustained bv her as a result of the misleading conduct of Mr Grav in the conversation with Mr Martin Jnr in relation to the protected resprav. The assessment of the loss suffered bv the applicant as a result of the resprav is not free from difficulty. in substance. the resprav had three interlocked effects. The 1ob which was done. apparentlv commensurate with the envisaged price, was such as to result in a vehicle which. on close inspection. betraved the fact of the colour chanae. As Mr Greaves explained. this would be a mator deterrent to manv purchasers. especially when combined with the fact that the paintwork showed blisters and some unevenness in colouring. The vehicle was a luxury. high performance sports vehicle likelv to appeal to persons keen to displav their smartness and having a purse which enabled them to indulge that ambition. Such persons would be unlikelv to be attracted to a vehicle in blemished condition. In practical terms and barrina extreme good luck - as mav have occurred when Mr Hall resold in March 1984 - the effect of this particular resprav was that the vendor would be likelv to have to finda purchaser from amonast those who were engaged in dealing with motor cars and who. like Mr Greaves. could take some action to 28. touch up the appearance before passina on the vehicle to another owner. The evidence clearlv establishes that. in the motor vehicle trade, there are two levels of price: a hiaher retail level at which people will purchase a vehicle for their own use and a lower wholesale level at which dealers will purchase. expecting to profit bv resale at the retail level. The effect of what was done was not merelv to render the vehicle less attractive but also. and consequentially. to remit Mrs Martin from the retail to the wholesale market. As the vehicle. after respray and until released to the applicant. was offered on the retall market the remittal resulted in delav in sale, ultimately puttina Mrs Martin in the position of being forced to sell ata price below that which she would otherwise t.ave been willina to accept. Althouah $16,000 18 a price at the bottom of the ranae, accepted onlv because of the particular circumstances, it 18 a price which she was forced to accept as a direct result of the conduct of the respondent. It was not suaqaested bv the respondent that Mr and Mrs Martin failed to take all reasonable steps to find a purchaser or that on 18 Julv there was anv likelihood. within the near future, of finding a purchaser at a price hiaher than that offered bv Mr Greaves. In the circumstances, I must take the fiqure of $16,000 as representina the best price which could reasonably be obtained in the circumstances in which the Martins found themselves in mid Julv 1983. 29. The more difficult question is to determine the value of the vehicle before the resprav was carried out. Counsel for the applicant urges that I should adopt the fiaqure of $25.000 and in this reaard he points to the concession made bv Mr Hunter, under cross-examination, that $25,000 was a realistic price to put on the vehicle at the time that it was taken on consiaqnment. Mr Hunter agreed that. for qood commercial reasons. he would not take in a car on conSianment except at a realistic price and that Mr Grav was aware of this. He aareed that he knew that Mr Grav had agreed to take the car in at a consianment valuation of $25.000. that he did not obiect to that and that. at 'he time. he thought that this was a reasonable price for the car. Mr Hunter said that when the car was displaved for sale it was at an askind price of either $27,000 or $28,000 and that there had been neqotiations with Mr Lord at $26,000. In response to this arqument. counsel for the respondent points out that the fact is that the vehicle did not sell. prior to the revainting, at a price sufficient to return the applicant 325.000. He arques that. in those circumstances, it 1s not realistic to use the evidence of asking price as evidence of value. The force of this submission depends upon the extent to which the vehicle was exposed for sale prior to the resprav. Mr Michael Martin said in evidence. and he was not challenged. that he used to pass the vard dailv during the period before he went 30. overseas and he did not once see the car in the vard. On the two occasions when he visited the vard he was told that 1t had been put awav because of the interest of Mr Lord. His evidence was confirmed bv that of his father. who frequentlv passed the premises in the course of his duties and who said that he did not see the car displaved at the vard at all wrior to the colour change, Mr Michael Martin's ship went directlv from Svdnev to Melbourne and 1t was whilst ne was in Melbourne that he had the conversation with Mr Grav reaarding the colour change. The lenath of time between Mr Michael Martin's departure from Svdneyv and the colour change could have been onlv a few davs. There was virtuallv no evidence on behalf of the respondent as to the display of the vehicle. Mr Hunter merelv said that. after the car was taken in. "we did not put the car on the front of the lot because I did not think it was qood enouqh in appearance to be one of the front ones". Mr Grav qave no evidence on the matter. I have no doubt that. over some period orior to the colour change. the car was displaved in the vard. However. it seems that the duration of Jisplav was short and that the vehicle was never accorded anv prominence. I am not satisfied that there was such a test of the market as to lead to the conclusion that the oriqinal askina price. adopted as reasonable bv Mr Grav and Mr Hunter. was not in fact a reasonable estimate of the value of the vehicle prior to the colour change. There is no evidence of 31. anv variation in the qeneral market during material times and it is, therefore, reasonable to conclude that the vehicle would have continued to command a retail value of about $25,000 had it not been respraved. It follows that the loss sustained bv the applicant as a result of the resprav is the difference between that fidqure and the ultimate sale price, namely a fiaqure of $9,000. This fiaqure should be added to the total of $1,250 arising out of the first and second claims with the result that the applicant should have iudqgement in the sum of $10,250 together with costs. I certifv that this and thems, (a0) preceding pages are a true copv of the Reasons for Judaement herein of his Honour Mr Justice Wilcox. Associate "\ CLL TTA oa LQ Date 2 e/ ° aa