CATCHWORDS Trade Practices - misleading or deceptive conduct - false or misleading statement - whether applicant's loss in fact caused by conduct complained of - Trade Practices Act, 1974 - ss.52, 53, 82 - Hire Purchase - hirer in arrears - voluntary surrender of vehicle - sale of vehicle by finance company - attempted redemption by hirer - alleged breaches by finance company of Hire Purchase Act, 1960. Hire Purchase Act, 1960 (N.S.W.) ss.13,14,15,16. LOTHAR KLEIN v GENERAL MOTORS ACCEPTANCE CORPORATION, AUSTRALIA N.S5.W. G369 OF 1983 aQ So Es) = Bowen C.d. 6 August 1985 ia Sydney. IN THE FEDERAL COURT OF AUSTRALIA SYDNEY DISTRICT REGISTRY wee vw ba} oO m had ax] 'oS mI a) — ov ma la GENERAL DIVISION LOTHAR KLEIN Applicant GENERAL MOTORS ACCEPTANCE CORPORATION, AUSTRALIA Respondent CORAM: Bowen C.J. 6 August 1985 REASONS FOR JUDGMENT On 13 November 1979 Lothar Klein ("Mr. Klein") entered into an agreement with General Motors Acceptance Corporation Australia ("G.M.A.C.") pursuant to the provisions of the Hire Purchase Act 1960 (N.S.W.) to purchase a 1976 Mazda Station Wagon. The agreement provided for the payment of $190.16 per month by Mr. Klein to G.M.A.C. Monthly payments were made until Mr. Klein was retrenched and became unemployed in about April —~ , 1972. In July 1972, when two instalments were overdue, certain communications took place between Mr. Klein and G.M.A.C. I shall deal with these in detail later. On 21 July 1982 Mr. Klein signed and handed over to Mr. Staples, a representative of G.M.A.C. a document described by its heading as "Voluntary Surrender" and Mr. Klein then drove his vehicle to Ron Hodgson Motors, Hume Highway, Cabramatta, motor dealers, and handed it over to them. Mr. Staples then secured five quotations from different dealers including Ron Hodgson Motors. The vehicle was sold to Ron Hodgson Motors for $1700 and Ron Hodgson motors paid to G.M.A.C. the sum of $2320.34 being the amount of the payout due to G.M.A.C. Mr. Klein has brought proceedings against G.M.A.C. in this Court seeking damages under the Trade Practices Act 1974 (Cth.) and under the Hire Purchase Act 1960 (N.S.W.). The amount of his claim under the Trade Practices Act was quantified as $1297.66 being the difference between the payout figure and the value of $3600 placed on the vehicle by the valuer called by the applicant. It was argued that the applicant, should have also compensation for loss of use of the vehicle, but no evidence was called which would enable me to place any figure on that. It was further argued that the applicant had been, out of his money a long time and that I should make a retrospective award to cover aunterest. However, the power to award interest prior to judgment was conferred upon this Court by Act No. 165 of 1984, which inserted s.51A in the Federal Court Act. This section conferred power to award interest in respect of causes of action arising after the commencement of the section. The power is not available in respect of the causes of action relied upon in this case. The amount of his claim under the Hire Purchase Act was quantified as $1375 being a figure based upon the value of $3600 placed on the vehicle by the valuer called by the applicant and a calculation made in accordance with sub-para.15(1)(b)(i) of the Hire Purchase Act. Turning to the evidence, it is my impression that the witnesses on both sides gave their evidence honestly to the best of their recollection. However, I may say that I felt more confidence in Mr. Ritchie's evidence than that of Mr. Klein when they differed. Mr. Richie's evidence accorded generally with notes which he made immediately following his conversations with Mr. Klein and placed with the company's papers. IT believe that after the lapse of time since .1982 and having regard to the strong feelings he holds about the matter, Mr. Klein was sometimes less accurate and inclined to transpose the order of events. My findings are that Mr. Klein entered into a hire purchase agreement with G.M.A.C. for the purchase of a 1976 Mazda Station Waggon; that under this agreement he undertook to make 42 payments of $190.16 at monthly intervals, such payments to commence on 13 December 1979; that he made his monthly payments until he was retrenched and became unemployed in about April 1982. It is not entirely clear on the evidence whether he paid the instalment for April 1982. He agreed in evidence that he did not pay the instalments for May and June 1982. Mr. Klein rang G.M.A.C. on 16 July 1982 and left a message with the girl telephone operator that he was unemployed and he asked if it would be alright if he had two weeks extension to pay the arrears. He says the operator said it would be alright. On 20 July 1982 he received a handwritten note under his door in the following terms: "L. Klein. Arrears $412.06 Urgent you contact re collection of arrears. Mark Ritchie on 4111444" Mr. Klein, on 20 duly 1982 rang Mr. Ritchie. There are some differences in their evidence as to this conversation. I am satisfied that the handwritten note of Mr. Ritchie made out at the time accurately records it. The note reads: "K phoned, advised he is unemployed and probably won't be able to pay for at least two (2) weeks. Suggested to K he hand back unit till he can pay arrears, he said if unit handed back he will not want it back and will just pay $5 pm off deficiency. Rep can collect unit 21/7/82 at home. Field advised." On 21 July 1982 G.M.A.C.'s field officer, Mr. Staples, called upon Mr. Klein. Mr. Staples first asked Mr. Klein would he be able to pay 'the arrears on the account. Mr. Klein said "No. I don't have the money". Mr Staples then explained to Mr. Klein how he could obtain an extension by paying a smaller amount, around $50 or $60, but Mr. Klein was unable to pay this. They then spoke of repossession and of voluntary surrender. Mr Staples told Mr. Klein that if he were to sign the voluntary surrender form there would be no storage fee charged and G.M.A.C. would be able to sell the vehicle straight away rather than ata later date which would mean the value of the car dropping. Mr. Kiein agreed. He then appeared to read and understand the Voluntary Surrender form and he signed it. Following this Mr. Staples said to Mr. Klein: "Tf you drive your car down to Ron Hodgson Motors, 1t will save you further money, as far as the towing fee 1s concerned". , Mr. Klein said: "Fine, I'1l drive it down". Mr. Klein then proceeded to drive the vehicle to Ron Hodgson Motors where he handed it over. He drove home with some friends who had accompanied him in another car. The voluntary Surrender signed by Mr Klein was in the following terms: "Contract No. 759-0804 48210 To/ General " Motors Acceptance Corporation, Australia. 10 Help Street, Chatswood. In exercise of my right under the Hire Purchase Agreement dated 13 Nov 1979 between the Corporation and myself in respect of 1976 Mazda 929 I (have returned) (propose to return) such unit to the premises of Ron Hodgson Motors at Hume Hawy Cabramatta at which place I understand the Corporation will accept such return. T acknowledge that the Corporation has not exercised any compulsion on me, or made any demand for such return, and that such Corporation is entitled to dispose of the unit by sale or otherwise, as it thinks . fat. I further declare that having voluntarily surrendered the unit the Corporation has not taken possession thereof so as to entitled me to any benefit granted to hirers by Law. DATED the twenty first day of July 1982. Signed L. KLEIN 13/33-35 Kenyon St., Fairfield." Mr. Staples also filled in and signed a form headed "Receipt for Repossessed Goods". This was confusing. It was apparently the only form used by G.M.A.C. whether a car was repossessed or surrendered. Its terms were obviously inappropriate for surrender. However, I find that the car was surrendered in accordance with the form "Voluntary Surrender" signed by Mr. Klein. There are differences in the two accounts given as to what was said and done at the interview between Mr. Klein and Mr. Staples on 21 July 1985. I accept the account given by Mr. Staples as substantially accurate. I believe that in his account, Mr. Klein was confusing some of the matters discussed between him and Mr. Ritchie on 20 July 1982 and those discussed with Mr. Staples. After the car had been delivered to Ron Hodgson Motors, Mr. Staples took the car and obtained from dealers four quotes for the sale of the car. He also obtained a quote from Ron Hodgson Motors. The car was sold to Ron Hodgson Motors for $1700, however there was some recourse against Ron Hodgson Motors, who forwarded to G.M.A.C. the sum of $2320.34. This sum of $2320.34 was received by G.M.A.C. on 11 August 1982. It is difficult on the evidence to fix the precise date of sale to Ron Hodgson Motors. It seems to have been within about three days after the original delivery to them on 21 July 1982. Mr. Ritchie of G.M.A.C. was by 6&6 August 1982 aware the vehicle had been sold to them, but he was not aware on the 28 July 1982 that the sale had taken place. This led to a series of errors and misunderstandings. On 28 July 1982 Mr. Klein rang Mr. Ritchie and informed him he wished to redeem the car. Eventually Mr. Ritchie, who was then unaware the car had been resold, toid Mr. Klein he could have the car back provided arrears and expenses were paid, damage fixed and the unit insured within two weeks. Mr. Klein said he did not know if this could be done but would keep in touch. On 6 August 1982 Mr. Ritchie became aware that the vehicle had been sold. He did not communicate at this stage with Mr. Klein. However, on 11 August 1982, that is, 14 days after the conversation of 28 July 1982, Mr. Klein, accompanied by his wife, visited Ron Hodgson Motors, and learned that his car had been sold. He then rang Mr. Ritchie and said he had the money plus the insurance money and said: "How do I get my car back now?" Mr. Ritchie said: "You don't because the car has been sold." At that time Mr. Klein would have needed to be able -to pay arrears of three instalments and also insurance, which he said he had arranged with N.R.M.A. and for which $306 ar some such amount would be required. Mr. Klein was still out of work and his wife's savings were reducing. Evidence of her savings account with the Metropolitan Credit Union, which was tendered, showed that although her credit balance on 10 May 1982 was $780 it was reducing while Mr. Kiein was out of work. On 11 June her balance was $140. On 12 July it was $254.81; on 16 July it was $54.81; and, on 10 August it was $84.81. It is clear that by 11 August 1982 it would have been impractical for Mrs. Klein to assist Mr. Klein by paying the amount of arrears out of her Metropolitan Credit Union account, let alone the amount of insurance. By 11 August 1982 the arrears had increased. On 13 August 1982 another instalment would become due. Some suggestion was made about obtaining assistance from Mrs. Klein's mother, but no evidence was offered to show how this may have been possible. The confusion and misunderstandings between the parties are unfortunate... However, I am satisfied that Mr. Klein agreed in the telephone conversation with Mr. Ritchie on 20 July 1982 to tee ee ee a ee. = ee surrender the vehicle; that when Mr. Staples called on 21 July 1982 Mr. Klein signed the Voluntary Surrender form; and that Mr. Klein then drove the vehicle to Ron Hodgson Motors to deliver up possession of it. I do not consider that he was misled about anything, when he did this. It is true a notice of repossession dated 13 June 1982 had been sent to him, but his evidence is that this did not reach him till after he had delivered up the vehicle on 21 June 1982. By what took place on 20 and 21 June 1982 the repossession procedure was superseded before the notice reached him. So far as Mr. Klein's claim under the Trade Practices Act is concerned, it does not appear to me that there was on the part of G.M.A.C. conduct that was misleading or deceptive or was likely to mislead or deceive within the meaning of s.52; nor that there was on the part of G.M.A.C. in trade or commerce, in connexion with the supply of goods any false or misleading statement made concerning the existence, exclusion or effect of any condition, right or remedy within the meaning of sub-s.53(g). So far as Mr. Klein's claim under the Hire Purchase Act is concerned, it appears to me that, although Mr. Klein was under pressure from the circumstances arising from his unemployment, he made a voluntary surrender of the vehicle on 21 July 1982 and has no claim based on the Hire Purchase Act. - 10 - Mr. Klein's later dealings with Mr. Ritchie on 28 July and 11 August took place after the vehicle had been disposed of to Ron Hodgson Motors. Both parties appeared to be acting ona mistaken basis. This was unfortunate, but it does not appear to me to alter the position which had been finalized by the disposal of the car to Ron Hodgson Motors. I may add that I am not satisfied that the disposal to Ron Hodgson Motors was at an undervalue. In the result I am of opinion Mr. Klein's claim must be dismissed. I understand the parties wish to be heard on the question of costs before I make a final order. I certify that this and the Q preceding pages are a true cop? of the reasons for judgment herein of the Court : -_ E Guta Associate Dated 6] S | 6S