IN THE FEDERAL COURT OF A * QUEENSLAND DISTPICT FEGTSTRY ! OLD G1lic <r 19R4 GENERAL DIVISiOW ' BETWEEN . MICHAEL JOFErPd WENTER Aprelicant AND: AF i. PTY LTD AND: CUSTOM CREDIT COPPOPATIG*? LIMITED ecand Respondent ié AND: CUSTOM CPETIT CORPORATIGN LIMITE Cross-Claimant AND: MISKAER JOSEPH WENTEP Fouret Cross-Pecrcondent AND: : AL.LLT. FTY Lh faront Cross-Respongeant MINUTES OF OF DFP _ TYDGE MAKING ORDER - EPCS . £34 Pons DATE OF ORDER: a4 VULY Lses - SCElV: LW SAEG joa WHERE MADE: Fri Pie , tree. vhs war "rl THE COURT GPDERS THAT: ° ° 1. Judgment oan Tavour "fF the applicant against the first respenaent in the sum fam of £2,554.80 ke enterer van Judgment in against the <4 £ 1 Of $7,594.80 be antered 3 The respondents bay the applicants' croascs of and incidental to thes~ proceedings including reserved costs, ta be tazed, 4. The farsat respondent may Fhe | eecand respondent's costs of and incidental to these crac such casts to anclude both the secand respondent's costs of resisting the applicants' claim and fhe ccsts of its claim againer cna first respondent. THE COURT DECLARES THAT: dD The first respondent is liable to indemnify; The Second respondent baal eespertc of such part, 1f any, of the said sum of 33,594.86 and costs rs the second respondent may pay under my Judgment in favour of the applicant. NOTE: Settlement and entry of orders 15 dealt with in Order 26 of the Feaeral Courr Rules. mm — IN THE FEDEPAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY ' OLD C110 ef 1984 GENERAL DIVISTON ) BETWEEN : MICHAEL JOSEPH WENTEP Aprelicant AND: A.F.I PTY Lp First Fespondert AND: CUSTOM CREDIT CORPORATION LIUITED second hespondenz AND: CUSTOM CPEDIT CORPOPATIGN LIAITED Cross-Claimant AND: MICHALCL JOSEPH WRNTEY Pirst Crass-Respordent AND: A.F.I. PLY £7h Second Cros¢-Fespondent PINCUS J. 26 JULY 1o9Re ES TEMPORE PEASONS POP JUDGMENT This 1s an application under the Traae Practices and otherwise, with respect to the purchase of a Ford Capri 3 mator vehicle in July last year. "4 The applicant. Mr Michasi Wencter. says that he acre 2 Pe] D yL to buy the vehicle from or through a dealer, being the first respondent A.F.I. Prey Ura. He complains that the venicie tras misrepresented in that it was said to be a 1975 model, vhereas 1t was in fact a 1571 model and, as ta that, he also says that there vas negligence with respect toa thea claim that the vehicle wag a c 1975 model. There are three foundations laid in Law: one, 2 tit ef the [rade Fractices Act; two, deceit: and, three, neqiigence. A quite separate aspect sf the claim is that it vas said by the applicant that the vehicle was, within the meaning of s.71 or the Trade Practices Act, not of merchantable quality and that neither of the exclusory conditions mentioned in s.71(1>) applied. The evidence 'vas principally directed ta the latter aspecr. Both Me Wienter, the appiicanct, and Mr Hartadine, the salesman who sold him the vehicl i . gave evidence that they thought ar tne time of sale that the vehicle's candition was not bad. Mr Harradine in his evidence, indeed, was rather more enthusiastic abent it. There were three thorough inspecticns of the vehicle, af which evidence was given, and i1t 1s to those, I think, that I should principally diurect my attention in trying toa determine faa what the vehicle's c¢ Qo ndition really vas. OF course, the applicant's case 1s that, wnile not appearing to oe in such a bad state on casual inspection, it turned out to be virtually worthless. The dates of the three inspections were ll duly 1984, 11 September 1984, and 18 Septemper 1984. Of those, the first was for the puresoses of issuing a roadworthiness certificate, as 10 is called; the second was an anspeciion done bv the Royal Automobile Club of Queensland: and the third was a Government inspection performed under the Motor Vehicls Safety Act 1986 These three inspections ajl have in common that they produced an unfavourable result ain that each of the versons conducting the inspection regarded the vehicle as being in very poor condition D Of the three witnesses who spoke of these iunspections, the oné who was most favourably disposed to the vehicle vas Mr Firth. However, I formed the impression that Mr Furth, hile no doubt giving his honest opinion, did not appear to have as ctiear a recollection of Che matter as did the orher two genclemen. In any event, I prefer the avidence given as to 13 duiy and il September. Counsel for the respondents did not challenge the evidence given by the witness from the Royal Automobile Club of Queensland, and counsel for the first respondent really pressed ry upon me the view, not that I should reject it, put chat, for various reasons, the vehicle must have substantially deteriorated in the two months before the inspection. It 15 unnecessary for Present purposes to give the details of Exhibit 9 which 15 the document that sets cut the result of the Royal Automobile Club of Queensland inspection. The summary 15 as follows:- "This vehicle is in very poor candition and extensive repairs woula be required fo being it ts — toe. oe eo a serviceable candition and consideration should be aiven to costs of repairs prior to purchase." Mr Walters, who gave evidence of having done the inspection, 'as Plainly of the view that the vehicle was probably not worth repairing. The other ainspecrion, which seemed ta me to be of considerable evidentiary value, was done on 13 July and that tas mn done by Mr Hodge. He claimed co rememter the specific vehicle well, and I think he did. His teport was not as comprehensive as that issued by che Poyal Automobile Club of Queensland, but his general view of che vehicle was much the same. He refused to issue a certificate of roadworthiness under the Motor Vehicle Safety Act 1980. IT accept his evidence as to its conditian. IT think that it probably did deteriorate somewhat in the subsequent two months, but noc greatly, and I teject the theary that the temarkable collection of defects shown in the Roval Automobile Club of Queensland report had all accumulated due to misuse.In shorc, I am satisfied, and indeed there can really he very little doubt, that the condition of the vehicle was very poor. It was, on the other hand, fairly cheap and it as an old vehicle. The circumstances which I have mentioned should, in my opinion, be taken into account when considering whether the vehicle is of merchantable quality for the purposes of s.71/1) of the Trade Practices Act. [It 15 nevertheless the cas® thata vehicle sold for driving purposes, whith 13 in such a condition a as is demonstrated bv the evidence here, cannot fulfil the statutory description. I hold that the vehicle was not of merchantable quality. Th two exclusory conditions in s.71(1) of the Trade D Practices Act are, firstly, that there is to be no liability as regards defects specifically drawn to the consumer's attention before the contract is made and, secondly, there is to be no liability as to defects which an examination should have revealed. It seems to me somewhat curious Chat the applicant, who I thought was an honest svitness, did not appreciate how bad the vehicle was. No doubt it was perfectly good when new, but there comes a time in the life of a motor vehicle when it is due to be "put our to graze", and I suspect that this vehicle had reached that point some time before, and the cosmetic attempts to disquise its deficiencies may have deluded the applicant. However that may be, there 1s really no suggestion on the part of the respondent that it was obviously deficient sr that defects were drawn to the attention of the applicant. Although I would have been inclined to suspect that Mr Wenter, the applicant. must have thought the venicle was not all it seemed, there is na foundation in the evidence for holding either of the conditions mentioned in s.71(1), which might exclude liability, to exist. I therefore hold that the vehicle was not of merchantable quality and that it was at the time only surtable for the wrecker. The evidence which was given by Mr Harradine, on behalf of the first respondent, was toa the effect that the vehicle was in gaod condition. and that he knew it to he s9. Me Harradine was, superficially, quite an impressive witness. He seemed frank and D>) amiable. but I réqret that I cannot accept his evidence in that respect. Indeed, I am quite satisfied rhat 1 15 not correct. The other factual dispute 1s one with which I have had more difficulty, and that 1s the question whether the vehicle was misrepresented. As Mr Twigg, counsel for the first respondent, rightly said, the matter comes down to setting the word of Mr Harradine against that of Mr Wenter. the applicant. I note that the applicant saad in his evidence, not that it was definitely asserted to be a 1975 model, rather, that Mr Hatradine claimed that he thought it was a 1975 model. The evidence is clear, on the part of the first respondent, that 1t was known not to be a 1975 model and known to be a 1971 model. Having in mind the heavy onus of proof, I still feel satisfred, and think I should find, and I do find, that what the applicant says about this matter is true. I believed it when he said it ta me and Mr Harradine's evidence has not dispelled that belief. The applicant is not a highly articulate man, at, least as he appeared wnen he gave evidence, but he seemed to he perfectly honest. I do not believe he invented the story and I think that he would have regarded the model year as a matter of some importance. It 1s, of course, possible that Mr Harradine has forgotten that he told the applicant that it was a 1975 model. If he did da so, however, and I have held that he did, then it is difficult to avoid the conclusion that it was a representation made at least recklessly because, as Mr Harradine says, the truth was easily ascertainable by a person who knew where to look and bothered to lcak. - ~--- Fs It appears to me, theretore, (that the vehicle was not only not of merchantable quality but there was a misrepresentation made, af least recklessly, as to its model year, and that the applicant succeeds on both legs of his claim. There was discussion during the course of the addresses as to the consequences of that, and as I understand rhe matter, 1t was agreed between counsel for the applicant, Mr Morris, and counsel for the first respondent, Mr Twigg, that the result of such findings as I have indicated would be as [Tellows: namely, that the applicant would have judgment against the first respondent for the sum of §3,190, with interest to the date of the judgment. On my arithmetic, interest at 12%, which seems to bo an be conceded to be a reasonable figure, from 5 July i984 ta duly 1285, 15 1n tne sum of $404.80 There will therefore be judgment in favour of the applicant aqainst the first respondent in the sum of $2,594.80, with costs. As to the second respondent, it 1s clear that there is no personal fault. There 1s no dispute that the liability as to the condition of the vehicle does not flow on. but the liability on the other leq goes through to the second respondent by virtue of the provisions of s.5 of the Hire Purchase Act 1953 of the State of Queensland which, so far as relevant, reads as follaws:- "Every reoresentation ... made to tha hirer ar prospective hirer, whether oral or in writing, by the ... dealer or any person acting on behalr of the ... dealer, in connection with or in the course of negotiations leading to the entering unto of a hire-purchase agreement, shall confer on the hirer - (a) As against the owner - -Ehe same rights ... as the nirer would have had af the representation ... had been made by an agent of the owner ..." Since the transaction here culminated in a hire purchase agreement and the second respondent is the "owner", that section, as I have said. appears to cover the claim. Therefore. the damages as against the second respondent will be the same. It is not absolutely clear to me that the second respondent's counsel conceded quantum. However, J find that the damages are correctly assessed, or at least closely enough to correctly assessed; when I say "closely enough", I have in mind a possibility that another means of calculation which was open on the evidence might have produced very slightly more. The consequence will be, therefore, that there w2rll be judgment for the avplicant against the second respandenct in the same sum that 15, $3,594.80. with costs. There 1S a cross-claim by the second respondent against the applicant under the hire purchase agreement, the amount of which 1s agreed to be $1,794.56, and I give judgment for the second respondent against the applicant in that sum. Next, there will be judgment for the second respondent against the first respondent in the form of a declaration that the first respondent is liable to indemnify the second respondent un respect of such part, 1f any, of the said sum of $3,594.80 and costs as the second respondent mav pay under my judgment in favour of the applicant. The orders for costs will be as follows: firstly, I order that the respondents pay the applicant's casts of and incidental to these proceedinas, including reserved costs, to be taxed; secondly, I order that the first respondent pay the second respondent's costs of and incidental to these proceedings to be taxed, such costs to include both the second respondent's casts of resisting the applicant's claim and the costs of its claim against the first respondent. "certify that this and roe 4 hes Prades are a true copy of the reasons fo judgment herein of His Honour Mr, Justice Pincus wo a Be / / ¥/ gr Associate Dated