CATCHWORES TRADE PPASTIC under hire <¢ micleading 9 merchantable quali Damages Consumer pertection - Motor vehicle acquired $2 agreemert - Wretner dealer engaged in ceptive marduct ~- Implied condition of ty - Whether breach cf implied condition - Trade Practice Wn weefam t wm ~i nae Q aT ' r ~~ . wi w AME ha tit tw ~ aI we . ~] uw . J 75A, 82 JENNIFER CATHERINE MACKAY v. R. J. YCERS TTY, LIMITED and OBS LiIMICED v. JENNIFER ROBERT JOHN HOBBS: R. J. Ho CATHERINE MACKAY - No. G 192 3f Neaves J. 10 January 1966 Canberra For the applicant and cross-respondent - Counsel : Mr N.F. Francey Solicitors: Malcolm Johns and Company For the respondents and the cross-claimant - Counsel 3 Mr §.G. Finch Solicitors: Dupree Davey Watson & Associates Dates of hearing $ 20, 21, 22, 23 May 1985 aie IN THE FEDERAL COURT OF AUSTPALTA ) NEW SOUTH WALES ELSTRICT REGISTRY No. G tg2 of 1984 GENDRAL DIVISION ; JENNIFER TATHEF INE MACKAY Applicant R.3. HOBBS PTY. LIMITED First raspondent RORERT JOHN HOLES JUDGE MAKING ORDER R.Jd. HOBRS PTY. Second respondent LIMITED Cross-~-claimant JENNIFER CATHERINE MACKAY MINUTE OF ORDER Poy Neaves Jd. DATE OF ORDER WHERE MADE : Canberra THE COURT ORDERS THAT: There be Catherine Mackay, against R. J. Hobbs Pty. Limited, judgment for the Cross-respondent 10 January 1986 applicant, Jennifer the first respondent, in the sum of $10,000. The application in so far as it seeks relief against the second respondent, Robert John Hobbs, be dismissed. The cross-claim by R. J. Hobbs Pty. Limited against Jennifer Catherine Mackay be dismissed. R. J. Hobbs Pty. Limited pay the applicant's costs of the application and of the cross-claim. Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA i Ya! ta ie) hh I wo o fa Yo. G NEW SOUTH WALES DISTRICT REGISTRY www GENERAL DIVISION JENNIFER CATHERINE MACKAY Applicant R.d. HOBBS PTY. LIMITED First respondent ROBERT JOHN HOBBS Second respondent R.J. HOBBS PTY. LIMITED Cross-claimant JENNIFER CATHERINE MACKAY Cross-respondent CORAM: Neaves J. DATE: 10 January 1986 REASONS FOR JUDGMENT This proceeding arises out of a transaction entered into in July 1983 whereby Jennifer Catherine Mackay ("the applicant") acquired a second-hand Silver Shadow Rolls-Royce motor vehicle (1974 model) registration number (N.S.W.) RR-081. The motor vehicle was offered for sale through R.J. Hobbs Pty. Limited ("the first respondent"), a company which carried on business as a motor dealer at Tamworth, New South Wales and which had a temporary office at the premises of Chevelle Motors wo Pty. Limited at 6 Victorra Road, Drummoyne, a suburb of ut Sydney. The transaction invoived a hicé purchase adreement between the applicant ara Mecrtantile Credits Limited whereby the applicant agreed to hire the vehicle for a period of 36 months at a monthly rental of $1248.62 on the terms and conditions set out in the agreement. The applicant claims, pursuant to s.82 of the Trade Practices Act 1974 (Cth) ("the Act"), to recover from the first respondent and from Robert John Hobbs. the second respondent, the amount of loss or damage alleged to have been suffered by her by conduct that was done in contravention of sub-s.52(1) or " $.53 of the Act. The basis of that claim is an allegation that she was induced "to enter into the transaction by certain -, "representations in relation to the vehicle alleged to have been ' | made' to her by Me Hobbs, as agent for the first respondent. It is alleged that those representations were false and i constituted misleading or deceptive conduct. As pleaded, the Soon, (a) that the vehicie was in good mechanical condition; (b) that the only mechanical work necessary to be performed upon the venicle was the replacement of an engine mounting; and {e) that the cost of ceplacement of an engine mounting was approximately $209. The representations were alleged to have been made during the course of two conversations in July 1983 hetween the applicant and Mr Hobbs, one at the premises of Ace-Hi Courter Service and the other in the course of a journey between those premises and Drummoyne. The applicant also alleges that there was a breach of the condition implied in the hire purchase agreement by sub-s.71(1) of the Act that the motor vehicle was of merchantable quality. She claims to recover damages against .e F 'the first 'respondent in respect of that breach, basing that claim on the provisions of s.73 of the Act. 'The 'applicant gave evidence that, at the relevant " * time, she was employed in the Bureau of Meteorology at a salary of $1200 per month. She also gave evidence that at that time ae -.She owned a business which was conducted from premises at Newtown, another suburb of Sydney, under the name "Ace-Hi Courier Service". That business, she said, was managed on her behalf by one Brett Wyatt. One of the employees was Reginald ¢ 4. Varley. Her evidence concerning her involvement in that business was, however. singulacly vague. She obviously took no part in the running of the Fasiness and knew nothing of 1ts financial affairs. She was unable, or unwiiling, to give any comprehensive account of the moneys (if anv: she recsived from the business. She simply said she did not remember. Sra insisted. however. that she had invested $59,900 to 560.000 in the business, that money representing accumulated savings which she kept at home in cash as she did not believe in banks. Ske also said that from time to time she gave substantial sums of money to Mr Wyatt who was. in the applicant's words ""flatting" with her at the time. She said he had no money of his own. She said that the deposit on the vehicle in question was paid out of her own moneys but she was unable to say what savings . she had at the time of the transaction. She said that in duly ~ 1983 she owned shares which were gold for $5,000, that money being used as part of the deposit on the motor vehicle. She agreed that she could not maintain the monthly payments under the hire purchase agreement from the salary she received from the Bureau of Meteorology and the moneys (if any) received from 'Ace-Hi Cour1rer Service. Those payments were to be made from her accumulated savings. In June 1983 the applicant had acquired a 1967 model Rolls-Royce motor vehicle registration number (N.S.W.) MHR-264 (in some of the documentation referred to as MNR-264), under a hire purchase agreement with NRMA Finance Limited. At the time eben tat srk ran . of the subsequent transaction, the amount outstanding under that agreement was $17,000. The applicant opened a cheque account with the Neutral Bay branch of the Westpac Bank either at the time of, or shortly before, the June 1983 transaction took place from which. apparently, payments to NRMA Finance Limited were made. Claim based on sections 52 and 53 According to the applicant Mr Wyatt and Mr Varley informed her that they had seen a Rolls-Royce motor vehicle available for sale in a second~hand car yard in Victoria Road. Drummoyne when they were driving past. Her evidence was that Mr Wyatt had telephoned her to say that he had seen the car, that it looked nice and that she would, perhaps, be interested in it. She said that Mr Wyatt had, without her knowledge or instruction, paid a preliminary deposit of $500 on the vehicle. Mr Hobbs, 'according to the applicant, subsequently came to the premises of Ace-Hi Courier Service at Newtown, the applicant presumed for the purpose of discussing with Mr Wyatt the sae an ''purchasé' of fleet cars for the business. The applicant said she was introduced to Mr Hobbs by Mr Wyatt and she became aware for the first time that Mr Hobbs had the Rolls-Royce vehicle seen by Mr Wyatt and Mr Varley. The applicant further said that in the course of conversation Mr Hobbs said that it was a beautiful car. in good condition and much better than the one she had been driving. In cross-examination the applicant said that during the first conversation with Mr Hobbs he said: "IT have a beautiful Rolls-Roves I think you would be interested in": that she said: "Really - What colour 135 1t7"; and he then said: "It is peacock blue. bone interior. It 15 1% beautiful condition, top quality car and Detter than the ene you are driving now". bBater she said that Mr Hobbs told her "at some stage" that the car he had for sale was better than the car she was driving but she could not be positive that it was during the first conversation. Later she again asserted that the words were spoken during the first conversation. Asxed how Mr Hobbs was able to compare the two vehicles when. so far as she was aware, he had not seen her car. the applicant could only speculate that he had seen the car "because Brett Wyatt was driving it". The applicant said that during the first conversation she asked whether she could inspect the vehicle and that Mr Hobbs replied in the affirmative and suggested that she come to the premises of Chevelle Motors on the following Saturday afternoon. According to the applicant she drove her car to the premises of Chevelle Motors Pty Limited at Drummoyne on the following Saturday. She said she spoke to the only person who was at the premises and whom she assumed was a salesman. The person concerned was not otherwise identified. The applicant said that the person she saw at the premises told her that Mr Hobbs was not there and neither was the Rolls-Royce vehicle. The salesman said of the vehicle for sale: "It is a good buy, top quality car in good condition". She said she regarded these comments as "salesman's talk". The applicant said she acceded to a cequest by the caleésman that he oe allowec to take her car for a drive. The applicant's evidence was that on 20 July 1983 she had a further conversation with Mr Hoobs at the premis Lit) 3s af Ace-Hi Cour1er Service. Asked about that conversation. her evidence in chief was as follows: "T met him in the courier office and he had all the forms for Mercantile Credits there and he said the car was ready to be picked up and all the things to sign were there with the car. I asked him again, what was the car like. and he told me 1t was peacock blue, bone interior. really good condition, top quality car. I still had not viewed it at this stage. I just believed him. So I said, 'Where is the car tonight?' He said, 'Well, it is garaged somewhere'. I said, 'Well, what about picking it up tonight?' It was about six o'clock - and he said, 'All right, but I will have to get it from the garage', and I said, 'All right. I will drive you over'." 1 pe In cross-examination she said that Mr Hobbs had been with Mr Wyatt in the inner office: that he came out into the outer office where she was and said: "I'm the one with the Rolls Royce. Here are the documents. Don't worry about it. I'1ll fill in the form and all you have to do is sign it." She said that Mr Hobbs appeared to write on the form having asked her for her name and address and where she worked. The cross-examination included the following questions and answers: 8. You do not deny, do you, Chat Brett Wyatt discussed the coming deal for the Rolls-Royce with Mr Hobbs on that day? I presume he discussed 1t, but he did not act for me And the deal. including the financial aspects of the deal. was finalised by the time Mr Hobbs came out of that inner office and asked you for your personal details, was 1t not? Iam teying to think what happened. Everything was worked out and I asked John Hobbs what was going on and he quickly told me. which I did not really understand anyway. He said, 'Everytning is okay, just sign the form', which I did. And ali the numbers had already been entered on the fcrm? I did not notice. You did not see them being put down, though, did you? All I saw was John Hobbs. He was sitting across the other side of the table and he was writing on a form. So he did not discuss the numbers with you? 'Yes. He said that he was going to pay out my 'NRMA loan and I was going to get $4000 as a «" deposit, and I was to write out two post-dated w, cheques, which I did. 'Nothing was discussed, though, about the time -charges and the!thire purchase agreement with you, '2 "'was it? > What is time charges? 'The interest you would have to pay on the hire purchase agreement that was on the document when eo you signed it. Yes. You had not approved or otherwise of it before you signed it? I did not worry about it because it is just another hire purchase agreement. 'And you did not read it? No. Because you knew Brett Wyatt had already checked it, did you not? No. Q. You did not know that Brett Wyatt had already checked 1t? A. I did not know. and I do not know now. QO. You assumed he had, did you A. As fac as - I just thought they must have told him about it obviously because Brett told me about the car. He said that he had viewed it, that is all, so presumably it came up in the discussion. Q. Your evidence 1s, 15 it not, that you had signed this document before you had seen the car at all? A. Yes." One of the the documents siqned by the applicant (Exhibit A) refers to the financial details of the transaction as follows - Cash price $45,000.00 Less deposit - Cash 10,000.00 Trade-in 4,000.00 Residue (unpaid balance) 31,000.00 The amount to be financed 31,000.00 Add terms charges 13,950.32 Total rent payable 44,950.32 Add deposit ; 14,009.00 Total amount payable (including deposit) $58,950.32 So far as appears from the evidence there was no discussion between the applicant and Mr Hobbs as to the cash 'price of the vehicle. The applicant was, however, aware that an amount of $21,000 was to be allowed by way of trade-in on the car she then had and of that $17,000 was to be paid by Mr Hobbs to discharge the applicant's indebtedness to NRMA Finance Limited and $4,000 was to be treated as part of the deposit on the replacement vehicle. The absence of any discussion with the applicant concerning the cash price of the vehicle or the 10. arrangements for the financing of its purchase is consistent with the answer which she gave in cross-éxamination and is referred to above that "Everything was worked out and I asked John Hobbs what was going on and he quickly told me, which I did not really understand anyway" The applicant then drew two post-dated cheques apparently on her account with the Westpac Bank to which reference has already been made, one for $5,000 and the other for $4,500. Those cheques, together with the preliminary deposit paid by Mr Wyatt of $500, made up the cash deposit of $10,000 which the applicant had to provide. The cheque for $4,500 was not cleared on presentation but arrangements were subsequently made for payment. According to the applicant, she then drove Mr Hobbs to 'Deumivoyne and dropped him off, somewhere near Victoria Road. He sas" to, éollect the car and neet her at the Birkenhead Tavern some "half an hour later. She said that during the journey she "chad a conversation with Mr Hobbs concerning the vehicle she was Han berane san aeaiiring. Accérding to the applicant's recollection what took "As we were nearing the bridge I asked him if there were any problems about the new car that I should know about beforehand. and he said, 'No, nothing to worry about'. He said, 'A nut might have to be tightened. It would be a $200 job and it is just a nut for an engine mounting'; and I said, 'Ts it important?' He said, 'It is not important at all. You can get it done whenever you feel like ll. it'.... He said, 'When it goes around corners you may hear a squeaking sound and that is all. Ie needs a bolt tightened'." The applicant identified the bridge of which she was speaking as "the one that qoes over towards Birkenhead Tavern" at Drummoyne. The applicant said that, having "dropped" Mr Hobbs near Victoria Road. she proceeded to the Birkenhead Tavern. Mr Hobbs arrived there about half an hour later and thev exchanged cars. The version given by Mr Hobbs of what took place differs in almost every particular. However, before turning to ae his version, some reference should be made to the history of "the vehicle. Mr Hobbs said that he first viewed the vehicle a ' sty 4s 'short" time before March 1983 in a repossession holding yard in be . x v" .Victoria when he was in that State buying cars. It had . 3 YF D oF -.), SeWietorian registration plates. It had been involved in a front ~ "end 'collision. As a result of seeing the vehicle he advised a : Pe, Mr Pid. Goodman, who either lived or had business premises at Dufal, New South Wales, to purchase it. The vehicle was on brought to Sydney and taken to the premises of Bruce R. Ross oo. eS Pty. Limited at Pennant Hills where certain repairs were carried' out in March and April 1983. I will refer to these 12. later. The vehicle was subsequently inspected and registered at the premises of the Department of Motor Transport (N.S.W.) at Waitara, a northern suburb of Sydney. Mr Hobbs was then asked to sell the vehicle. He arranged for it to be on display at the premises of Chevelle Motors Pty. Limited at Drummoyne. It was there, he said "on consignment" - so that, if that company effected a sale, it would receive the commission. Mr Hobbs also said that he had driven the vehicle on two or three occasions. From his driving of it he concluded that it had a broken engine mounting and that its front tyres, being over-sized, were scraping on the body work on full lock "tor re "an éither direction. Otherwise, he said, no defects were Tope, he o per 'Papparent to him as a result of driving the vehicle and he had po oO -reservations about its roadworthiness. He agreed that he _ According to Mr Hobbs, he received a telephone call 'customer, The car, he said, was taken to the premises of Ace-Hi Courier Service at Newtown. A «#2. Latecs., acicedirgls to "Ur Herbs, ne war felines diiven to the albloort cv Me Renan, Tr the way cney jerk ne the seemices oF Ace-Y. Taoustes Service at MNewtiun 'le -"irs chere sw tne vahitle tnat was Latec traded in and tacn Aan oa wTonvercatacn with Mr Wrath Thece WAt A GLSTISsien Ai tI othe amount to ba allowec as a teade-in en the venzcie Mt Hehl: had S65.) Oucvside Me bivatt wanted $25,000 but Mrs dobbs torstaered this too muck. Mr Wyatt said: "Give it gome thought and give me & cing when you ger back". On his Feturn from Tamwoeoth a few days Later. Mr och said. he telephoned Mr Wyatt and after zome disctussion the amcunt of the trada~-1n allowance was aqresd, Mr Hobbs 2214 Mr Wyatt that, if Mr Wyatt wanted the car. he, My Hobks. would require a deposit. Prior to the deposit being paid there was, according to Mr Hobbs, a further telephone conversation between Mr Wyatt and himself when Mr Wyatt said that he needed finance to be arranged for the purchase of the vehicle. Mr Hobbs then asked for the necessary credit particulars to which Mr Wyatt replied: "There was no use him financing the car because he had a bad credit rating...but his girl friend had a qood credit rating so he Cwould] put it in her name for a while". Mr Wyatt said he would obtain the necessary credit particulars. Acrording cto ite Habks, he again went to the pramizes of Ace-Hi Courzrer fervice a few days ila pa) cr ol s w[en ie} p. re) ham wu jar re ct = % preliminary desosit 2F $50) ana was given orally parcitulass for the proposed hice surchase ag¢eement. He tnen returned to Chevelle Motors Fty. Limited ana teleononed the particulars to the manager of his business at Tamworth. Subsequently, he telephoned Mr Wyatt to arrange a meeting with the applicant. That meeting was arranged for 20 July 1983 at the premises of Ace-Hi Courier Service. He said that both Mr Wyatt and the applicant were oresent at the meeting. He informed Mr Wyatt that Mercantile Credits Limited required a letter confirming that the applicant was employed at Ace-Hi Courier Service and that he. Hobbs, would have to undertake to repurchase the vehicle if the applicant failed to fulfil her obligations under the hire purchase agreement. He said he had with him the hire purchase documents which had been received by him from his Tamworth office with most of the particulars already inserted therein. He said he filled in only the registration number and the description of the car being purchased. He signed the document as a witness to the applicant's signature. He agreed that he received from the applicant on that occasion two cheques, one for $4,500 and one for $5,000. It is convenient to mention at this point that the cheque for $4,500 was endorsed in favour of Mr Goodman and apparently lodged for collection with the Pymble Branch of the ANZ Bank for credit to an acount in the name of P.J. and 86.L. 1S. Goodman at the Kent Street. Sydney branch of that bank. According to a bank notification that the cheque had not been paid on presentation, the cheque had been Lodged with tne bank on 20 July 1983. Mr Hobbs said that. at the méetina on 29 July 1983, he unformed Mr Wvatt that the vehicle oronably requiced an encine mounting to be replaced and he offered to fix it. Mr Wyatt. according to Mr Hobbs, said he would do 1t himself. He said he had no discussion at any time with Mr Wyatt as to the condition of the vehicle being purchased, the discussion being limited to the trade-in allowance to be made on the 1967 Rolls-Royce. Mc Hobbs explained why this was so by saying that Mr Wyatt had already (a week before his first meeting with Mr Wyatt) decided to buy the car. Mr Honan, he said, had already 30ld the car to Mr Wyatt and it was bad business practice in selling cars to "sell a car twice". Mr Hobbs denied that he had any conversation with the applicant prior to 20 July 1983 or that he had arranged for her to visit the premises of Chevelle Motors Pty. Limited to inspect the vehicle. According to Mr Hobbs, the hire purchase documents were then returned to his company at Tamworth and there submitted to Mercantile Credits Limited. The proposal embodied in the documents was accepted by that company on 25 July 1983. 16. Mr Hobbs agreed that the vehicle was delivered to the applicant at a car park at Birtennead roint., Drummcyne in the lat= afterncon or early avening. He said, nowevec, that 1° was & couple of days at least" after 206 July 1223 though he couid not recall che exact date, He denied that he had been driven from Newrswn to Drummoyne by the apolicant. He also denied that at the time the applicant took delivery of the vehicle there was any discussion as to its mechanical condition. He said he was not prepared to hand over the car on 20 July 1983 as "Mr Wyatt did not have insurance on the car and I was not about to hand him over a $45,000 car without insurance". He said that insurance was effected over the next few days. Mr Theodore William Homeyer, a director of Chevelle Motors Pty. Limited, gave evidence that in June 1983 he spoke to two persons about the vehicle the subject of this proceeding. He said he spoke to Mr Varley and Mr Wyatt, the latter having been introduced to him by Mr Varley. The conversation took place at the premises of Chevelle Motors Pty. Limited at 69 Victoria Road, Drummoyne. Before referring further to that conversation, brief reference should be made to the evidence of Peter James Roberts who at the relevant time was employed as a salesman by Chevelle Motors Pty Limited. Mr Roberts said that he had a telephone conversation with Mr Lyall of the firm of Lyall and Vine following which two men, one of Mr YP a PO vas Me Varley, 12°28 72 the premises and ghived che vehilis tn yueitian. Sfter they hai briefly eocar "er poberts coefecred than to Mp comarvec. Homeyes v avidenit Icsneeeing his convecaation with &S TDLLows. . De you ceécall any conversation ta tne best of your cecollecticn thar you had wita Mr Wyatt? Ves, sir, I do. What conversalion was tat? Mr Wyatt said to me, 'What scert of cars is this?' ITosaid, 'It's not nz bad cac.' Re said, 'What year model is it?' 2 said, 'It's a i974 nedel'. He said. 'Do vou know how many owners 1t has had?' I said, 'No. I as not.' We chen - Me Wyatt then looked over the vehicie together with him and I more or less showed him over the vehicle and further conversation took place from there. You do not recall the exact nature of that conversation. or do you? I recall some of the conversation, sir, yes. Do you recall any further conversation with Mr Wyatt? Yes. I do. What conversation 1s that? He said to me. 'What has happened to the quard here?' and he indicated the front right hand guard of the Rolls. I said, 'It's obviously been involved in an accident there.' He said, 'Oh, yes, I can see that.' Do you recall anything further? There was additional conversation then concerning ordinary points on the car, the operation of controls of the vehicle. and he said to me, 'How much are you asking for the car?' I said, $45,000'. What happened then? I said, 'How would you - if you decide to buy the vehicle - intend to settle?' He said. 'Well, TI have got a trade-in.' <I said. 'What sort of car 1s 1t?' He sald, 'i have got a Shadow 1966 model.' He said. 'How much would you give me for that?' I said, 'It's seezng the tar, but I am e yeey difficult without ou opportunity cf having a i a e1f you give us the kab uit. Iwill work . 'NOuld you lake to + our a deal far you.' I a SAL denve this car?' He said, 'No. not just vet. How does it drivet' I said 'tt drives very well, Tt does need an engine mounting and the tyres that have been fitted are tco large.' He saia 'What do you mean?' Isard. 'Well it doesn' bs t matter sco much about the tvres except they scrave. one tyre scrapes. when you turn the car into full lock.' There was some further conversation in relation to finance company interest rates. and a short time after. both Varley and Wyatt left. Ther® was no fixed appointment concerning the inspection of a trade-in or any further comeback," Mr Homevyer said he had no further conversation or contact with Mr Wyatt thereafter. Mr Homeyer also said that at the relevant time he had three employees at the car yard in Victoria Road, Mr Peter Roberts, Miss Lindy Moran and a car washer whose name he could not remember. Mr Gary Daniel Honan gave evidence that in June and July 1983 he was a commission agent working on occasions for the respondent and for the firm of Lyall and Vine. He said that late in June 1983 he received a telephone call from Mr Andrew Lyall as a result of which he picked up a Rolls-Royce motor vehicle and took it to the premises of Ace-Hi Courier Service at Newtown. There he saw Mr Wyatt and Mr Varley. Mr Wyatt then drove the car for some 20-30 minutes with Mr Honan and Mr Varley as passengers. After returning to the premises of Ace-Hi Courier Service. Mr Wyatt, according to Mr Honan, said that he would lixe to purchase the vehicle. There followed some discussion about the trade-in allowance on a dara a blue Rolls-Royce. Mz Honan said thar he. Wyatt, would have to speak to Mr Lyall regarding the trade-in allowance. He. ME Honan, then drove tne vehicle back to the oremises of Chevelle Motors Pty. Limited. Mr Honan said that, about a week or ten days later, he drove Mr Hobbs to the premises of Ace-H1i Coucier Service on the way to the airport. He accompanied Mr Hobbs into the office and introduced him to Mr Wyatt. He then left and returned to the vehicle he was driving. He had no conversation with Mr Wyatt about the proposed purchase. The parties were agreed that Mr Wyatt was not available to be called asa witness, enquiries as to his whereabouts having proved unsuccessful. It was agreed that no inference adverse to any party should be drawn from Mr Wyatt's absence from the witness box. That being the state of the evidence on this aspect of the matter, the question is whether the applicant, has, on the balance of probabilities, established that there was a contravention of sub-s. 52(1) or s. 53 of the Act. 20. The applicant did not create a favourable impression as a witness. Indeed. I found her ¢4vidence quite unsatisfactory on a number of matters. She 12 clearly a woman of some sophistication and intelligence yer in relation to her business dealings she sought to give the impressicn of complete naivety. I have alceady commented upon the unsatisfactory nature of her evidence concerning her involvement in che business of Ace-Hi Courier Service and. in particular, as to her role therein and as to the moneys (if any) she received from it. In addition. I can only regard her evidence as to her own financial resources as unsatisfactory and less than frank. If the applicant is to be believed, Mr Wyatt saw the motor vehicle in question at a car sales yard while driving past and, without her knowing anything about it, paid a preliminary deposit of $500 on the vehicle out of moneys belonging to her. So far as appears, the applicant was not told by Mr Wyatt of the orice of the vehicle or any details about it - not even its colour - and she agreed to purchase it without inspecting it or having atest drive. Indeed, on her evidence, the purchase was made without anyone on her behalf - neither Mr Wyatt nor Mr Varley nor anyone else - making an inspection of, or test driving, the vehicle. The applicant's evidence was that, by arrangement with Mr Hobbs, she went to the premises of Chevelle Motors Pty. Limited to inspect the car one Saturday afternoon. Mr Homeyer, the time, both gave eviaence that they were not the cerson whem the applicant saw at the varu. Me Hobbs was clearly not the person the applicant said she saw and Mr flonan aise said that he had not seen her at the yard. Having had the opportunity of observing the applizant in the witness box, FT am satisfied that. if Mr Hobbs had failed to keep an appointment to meet her at Chevelle Motors Ptv. Limited so that she might inspect the car. she would have made 1t her business to remonstrate with him - yet no suggestion that this occurred appears in the evidence. I am unable to accept her evidence in this regard. I am equally unable to accept her evidence that on 20 July 1983, immediately after signing the hire purchase documents, she drove Mr Hobbs to Drummoyne and took possession of the vehicle at or near the Birkenhead Tavern. It is, [I think, improbable that Mr Hobbs. a car dealer, would not have used his own transport to travel to the premises of Ace-Hi Courier Service so that, toa act in the way the applicant suggests, would have involved leaving his means of transport at Newtown. Further, there is the statement on the face of the bank document to which I have already referred to the effect that the cheque for $4,500, admittedly handed by the applicant to Mr Hobbs on 20 July 1983, was presented to the ANZ Bank on iS) tl that date. This would have been impossible if the applicant's evidence is accepted as she said if was nor until about §.00p.m. that the arrangements to pick up the car were made. There are iso some unsatisfactory features ain the evidence given cn benalf cf the respondents in rejaticon to the Eransaction. According to Me Hobbs. Mr Wyatt had already agreed to purchase the vehicle for $45,000 before he, Mr Hobps, had any conversation with him. According to Mr Hobbs. the vale of the vehicle had been arranged by Mr Honan, but it is clear from Mr Honan's evidence that. although Mr Wyatt after driving the vehicle told him he would like to purchase it, no arrangements for the sale were made with Mr Honan. Mr Honan's involvement did not extend beyond driving the vehicle to Newtown so that Mr Wyatt could test drive it. It is equally clear that Mr Homeyer did not sell the vehicle to Mr Wyatt: the conversation he had with Mr Wyatt at the premises of Chevelle Motors Pty Limited was quite' inconclusive. Mr Honan became involved, so he said, by reason of a telephone call he had from a Mr Andrew Lyall of the firm of Lyall and Vine. A _ telephone call from Mr Lyall to Mr Roberts also preceded the visit of Mr Wyatt and Mr Varley to Chevelle Motors Pty Limited. Mr Lyall was not, however, called as a witness and neither his absence nor his part in the transaction has been explained. 23. Notwithstanding these unsatisfactory features in the h evidence adduced on behalf of the respondents. I am satisfied that Mr Wyatr had aA much greater anyclvement in the arrangements for bChe acquisition of the vehicie than the ant would concede and that all the detaiis of w Le) "TS fp Be fe) transaction wer? arranged with him and net with the applicant. The answer which the oplicant gave 1n cros3-examination, and which is set out in its context earlier in these reasons. to the effect that everything was worked out between Mr Wyatt and Mr Hobbs and that she asked Mr Hobbs to explain the details to her is illuminating. On the balance of probabilities, I prefer Mr Hobbs' version of the events which led to the acquisition of the vehicle by the applicant. That version is supported in some particulars by the evidence of Mr Homeyer and Mr Honan whose evidence I accept. I am not satisfied that Mr Hobbs made the representations to the applicant which she has alleged as the basis for her claim under ss.52 and 53 of the Act or that, in so far as any statements were made to her by Mr Hobbs, she was induced thereby to enter into the transaction. Her claim based on ss.52 and 53, therefore, fails. ' Claim based on sections 71 and 73 I turn now to the applicant's claim against the first respondent based on ss.71 and 73 of the Act. Section 71. 30 far as material, provides: 24. " C1) Where a corporation supplies 'otherwise than by way of sale by auction) goods to a consumer in the course of a Susiness, there 15 an implied condition that tne goods supplied under the contact for the supply of the goods are of merchantable quality, except that there is no such condition by virtue only of this section- (a) as regards defect: specifically drawn to the consumer's attention before the contract 1s made: or (b) if the consumer examines the goods before the contract is made, as regards defects which that examination ought to reveal." As to the meaning of "merchantable quality", sub-s.66(2) provides: "(2) Goods of any kind are of merchantable quality within the meaning of this Division if they are as fit for the purpose or purposes for which goods of that kind are commonly bought as it is reasonable to expect having regard to any description applied to them, the price (if relevant) and all the other relevant circumstances." Section 73 provides: "73. Where- (a) a corporation (in this section referred to as the 'owner') enters into a contract for the supply by way of ; lease, hire or hire-purchase of goods Blow. to a consumer; (b) antecedent negotiations in relation to the contract were conducted with the consumer by or on behalf of another corporation that is not related to the owner; (c) the other corporation supplied the goods, or caused the goods to be supplied, to the owner; 25. (d) the owner did not take physical possession of the goods before they were delivered to the consumer: and 53 or damage as f£ ai condition @ contract by or 72, .@) the consumer suffers los a vesult of a breach o that 13 implied in th virtue of section 79, 71 the owner 1s not unde: any liability ta the consumer by reason ot the breach of chat condition but the consumer may recover the amount of the loss or damage by action in a court of competent jurisdiction against the other corporation." It 13 not disputed that the vehicle was supplied (otherwise than by way of sale by auction) by Mercantile Credits Limited and that 1t was supplied to the applicant as a consumer (see s.4B of the Act). The transaction. therefore, falls within the purview of sub-s.71(1) and there is to be implied a condition that the vehicle was of merchantable quality. It is not asserted that the exceptions set out in the sub-section have any application to the facts of this case. There is also no dispute that pars (a)-(d) of s.73 are satisfied. The question is whether the vehicle was of merchantable quality and, if so, whether the applicant suffered loss or damage as aresult of the breach of the implied condition. If both those questions are answered in the _, applicant's favour, she is entitled, in the terms of s.73, to "recover the amount of such loss or damage by action in a "court of competent jurisdiction", this being a reference to a State court invested with federal jurisdiction. However, as the claim based on ss.71 and 73 and the claim based on ss.52 and 53 26. are part of the same matter. this Court has iurisdiction to entertain che claim: Stack v. Coast Securities (No.9) Pty. Ltd. (1983) 154 C.L.R.c6l. The evidence upon which the applicant relies to support the conclusion that the vehicle was. when supplied, not of merchantable quality is that of John hobert Vawser. Lesiie Ferguson Howson and Francis Andrew Howard. During the few weeks after the applicant took possession of the vehicle she noticed a number of minor defects in it - the air-conditioning, the radio and the cassette player were not working. She said that when the car went around a bend she could hear a grinding noise but she did not take much notice of it. A short time later (within about four weeks of having taken possession of the car), the paintwork was damaged by vandals and at the suggestion of Mr Wyatt she took the car _to John Vawser Motors Pty. Limited. Arrangements were made for the car to be returned to that company's premises some weeks later for the purpose of having the necessary repairs carried out and the vehicle overhauled. Mr Vawser of John Vawser Motors Pty. Limited is a 'trained motor mechanic with over 25 years' experience working on Rolls-Royce and Bentley motor vehicles. The nature of the company's business is the carrying out of mechanical repairs on such vehicles. Mr Vawser said that an inspection of the 27. 7 . vehicis in question disclosed that the rear brake discs were rusted out. engine mountings were broken and the tail shaft was hitting the tunnel in the centre of the car. Mc Vawser ier] ald that. having fitted two new engine mountings. one front and one crear, he observed the way in which the engine was sitting in the front sub-frame, sometimes called "the engine cradle frame". It was apparent to him that the vehicle was out of alianment, this being confirmed by the misalignment of the tail shaft in relation to the rear sub-frame. He, therefore, arranged for the vehicle to be taken to James Somers and Co. Pty. Limited for jig testing. By reference to a workshop manual Mr Vawser explained, in general terms, the front and rear sub-frame and suspension assemblies of the vehicle in question. The front sub-frame is rectangular in shape and on it are mounted the engine, gear box and front suspension units. The rear sub-frame is also rectangular in shape and carries the two rear trailing arms, the rear suspension and wheels and the differential assembly. The front sub-frame has four mounting points by which it is attached to the left and right hand front body rails. Mr Vawser explained that there is a jig or template which will, if the vehicle is properly aligned, fit into certain holes in the top plate of each of the front suspension coiled spring towers. we 28. Mr Vawser 3gaid that. running his anand alono the side of the body rails of the vehicle he could feel a buckle in both the left and right hand tbody rails. He said he was aimost positive the main zub-frame was also bent. Having expressed the opinion that the vehicle had been involved in a maior front end collision. he was asked what effect such an accident would have. He said: "Push everything out of squareness - a long way out - you would be scrubbing tyres out, when you get up a bit of speed it would be hard to control, it could put more strain on the engine mounting, and the next thing they would break and the engine is flopping around inside the car." He said that stress would increase at faster speeds and on cornering with the possibility of the engine mountings which are of bonded rubber working loose or breaking. He further 'said: "I would not really call it a real safe motor vehicle." , Mr Vawser made an', estimate of the cost of the mechanical work necessary to repair the vehicle. He estimated "the cost at $6,030 including $3,500 for the cost of purchasing "a replacement front sub-frame. Mr Howson is a principal of Howson and Rapp Pty. Limited, formerly James Somers and Co. Pty. Limited, a company which carries on business as a motor body repairer specializing in Rolls-Royce vehicles. Mr Howson is a licensed panel beater, 29. having qualified as such ain December 1961. He commenced employment with the company in 1977 when his experilence with Rolis-Royce motor venicles beaan. He said that he inspected the vehirzle in company with Mr Somers. Asked to describe the condition of the vehicle, Mr Howson said: "There was some paint rectificaticn needed doing to the bonnet. the off-side front guard, and I think the near side front guard, and somewhere on the back. We were then asked to have a look at it while we had the vehicle there for something wrong underneath the vehicle because there was a rubbing noise or something out of alignment with the tail shaft. We put the car up on the hoist and we investigated underneath, only to find that the body rail specially on the right hand side was badly bent and out of alignment. The engine cradle also showed signs that it had been out and had portapower put into it to make it fit to what we call trunnion bolts." He explained that the expression "portapower" referred ta an "hydraulic ram used in pushing panels into place. He said that the engine cradle had holes about 3 inches in diameter at each corner into which fit trunnions made of aluminium and rubber with a hole of'about 3/8 inch diameter in the middle. The engine cradle is attached to the chassis or body rails by bolts passing through the trunnions. He said he also discovered by measurement that there was a discrepancy of about 5/8 inch "between the wheel base on the left hand side and that on the right. Mad oO various points. These had, in his view, been inserted so as to make less obvious that the body was not properly aligned. He Sald that the off-side front mudaquaid had an outward bow in ut £ had also been welded tu ct indicating thac it was wund in} aa aad th Ss. to the body razrl while that member was in 1ts bent cendition. iy Mr Howson said the vehicle had been in a serious accident which had resulted in big bulges in the body rails. He expressed the view that the misalignment of the vehicle wags a major one and he agreed with Mr Vawser's assessment that it would be necessary to remove and replace the front sub-frame. He estimated the cost of repair. in addition to the cost which Mr Vawser had estimated for mechanical repairs. at $8,564, the total estimate, therefore, being $14,595. He agreed that the vehicle was not in a satisfactory roadworthy condition. Indeed, he said it was not safe. In the light of the evidence given by one of the respondents' witnesses to which I will refer hereafter, it should be noted that neither Mr Vawser nor Mr Howson was cross-examined upon their evidence that it would be necessary to replace the front sub-frame. In particular, it was not put to elther of them that the misalignment of the vehicle of which they had spoken was capable of correction by means of what is 31. called the lateral location or voanhard rod at the front of the vehicle and the horizontal compliance mountings towards the rear. Mr Howard is a motor vehicle inspector employed by the National Roads and Motorists Association. He 1s a2 qualified and experienced motor mechanic, panel beater and paint inspector. He has had. however, no training or repair experience in relation to Rolls-Royce vehicles. He inspected the vehicle on 9 December 1983 at the premises of Windsor Motors, South Windsor. Following his inspection, he made a written report which states that a visual inspection under difficult conditions revealed the listed _ defects. The comment that the conditions were difficult reflected the absence of hoist facilities in consequence of oe which he had to rely on floor jacks to enable him to inspect 'the, underside of the vehicle. The defects disclosed in the . 'report which are significant for present purposes are items -_ fA), (b), (c) and (d) under the heading "Vehicle Frame (Chassis)" and items (m) and {q) under the heading ~ "Mechanical." Those items are: " VEHICLE FRAME (CHASSIS) (a) A crease and split evident in right hand front rail near shock absorber and coil spring tower. (b) Engine cradle frame showed signs of recent removal. (c) Variations in paralle and diagonal measurements evident in right and left hand sides of frame, Ridht hand side approximately fifteen millimetres short and not within accepted tolerances. {(d; Spacers were fitted to front Dumper bar brackets. MECHANICAL (m) Variation in whesi base. right hand side shorter. (q) Witness marks on tail shaft and tail shaft tunnel. evident of previous tail shaft misalignment." The report also notes the presence of spacers which had been fitted to the top radiator panel on the left hand side of the grille and to the bonnet hinges. The report concluded: "From the above aforementioned major work would be necessary to acceptable and serviceable return this condition and this vehicle to an work would be extensive and expensive. It would frame, components involve the attention to as listed, repairing of the bodywork and a quotation vehicle mechanical should be sought prior to attempting the repairs." In his oral evidence Mr Howard said that the circumstance that the frame of the vehicle was bent led him to conclude that the vehicle had been in a major accident. Mr Howard agreed that crease and split that he front body rail. He was effect such a defect would have said was evident he took no measurements of the in the right hand not able to express a view as to the on the roadworthiness of the Poe ww ive) vehicle. He said. however. that, being structural damage, it was essential that it be repaired. Its presence, he said, would lead to reqistratisn of the vehicle being refused. Me Howard said that, with the azd of a tremmel bar. he compared the distances between corresponding points on the right and left hand sides of the vehicle and concluded that the distance on the right hand side was shorter than the corresponding distance on the left. He did not accurately measure the difference but estimated it at 15 millimetres. He confirmed that there was a discrepancy in the diagonal measurements taken between the points used for making the parallel comparison. He said he also satisfied himself that there was a variation between the wheel base on the left hand side and that on the right but he did not make any measurement of the variation. He also said that the tail shaft, when rotated, was not touching or rubbing on the tunnel when he inspected the vehicle although, by reason of the observed marks being shiny, he concluded that they had been made in the recent past. For the first respondent, evidence on this aspect of the matter was given by Mr Bruce Robert Ross, the managing director of Bruce R. Ross Pty. Limited. That company carries 34. on business as a Rolls-Royce service and spare parts agent. Mr Ross 18 a qualified mechanic. a qualified panel beater and a qualified spray painter. The company carried out certain repairs on the vehicle in March or April 1983 after it was brought to Sydney from Melbourne. The work then carried out concerned the right hand front panel, repainting of the vehicle and refurbishing of the leather and timber work. No work was done on the body rails, the sub-frames or the drive train as none was requested by the owner. After the repairs were carried out Mr Ross had the vehicle registered. Mr Ross was adamant that the vehicle was in perfect 'condition when it left his company's premises. Any defects in . the vehicle subsequently discovered must, according to his evidence, have arisen from the vehicle having received a bump, BN oot 3 or having had certain components removed and refitted, after it "Gi left his charge. Mr Ross said that his inspection of the vehicle did not reveal any defects in the right hand body rails or the .! front sub-frame. He added that, unless a crack or split in the i front body rail was of "some great magnitude", it would not affect the safety of the vehicle and, in any event, could probably be repaired by welding without removing the front sub-frame from the vehicle. He also said that a crack or split 35. in a front body vail would not affect the wheel base of the vehicle though a very significant bend would do so. A crease in a front body rail could aiso, he thought, be repaired in situ. He considered 1 unlikely that a bent body rail would affect the safety of the vehicle. He described a test. known as a drop-line test, designed as ameans of checking the geometry of a vehicle. Such a test is carried out by first establishing the centre line of the vehicle and then marking on the floor by means of a drop line the positions of given points on the front and rear sub-frames. The resulting configuration on the floor enables checks to be made on the relationship of the sub-frames to the body frame by taking certain parallel and diagonal measurements. The tolerances allowed in each measurement made as a result of a drop-line test is, according to the workshop manual, .062 of an inch or 2-59 millimetres. It is apparent that this or a similar test was carried out by Mr Howard. According to Mr Ross, adjustments to correct any misalignment of the front or rear sub-frames could be made by the lateral location (panhard) rod and the horizontal compliance mountings respectively. In his opinion, an adjustment of the panhard rod could compensate for a difference in the right and left hand parallel measurements of 15 millimetres whether or not the front sub-frame or a body rail was slightly bent though the adjustment that could be made in 36. any particular case would depend ona number of factors. uncluding the extent to which the panhard rod or the compliance mountings had already been adjusted to take care of any misalignment. In his view, 1f the difference between the right and left hand parallel measurements was not more thar 15 millimetres and if it were assumed that that difference resulted from a bend ina front body rail, the bend could be described as a very small or slight bend only. According to his evidence, it is not possible to determine whether the front sub-frame of a vehicle igs distorted without removing it from the vehicle and applying a jig test. As to the use of spacers, Mr Ross said that they were frequently present on new Rolls-Royce vehicles, that they were -standard replacement parts and that they were customarily used "Loe in the repair of Rolls-Royce vehicles. ' 3, Mr Ross said he didnot notice on his inspection of the vehicle whether there were any witness marks on the rear 'tunnel indicating that the tail shaft was out of alignment. He ar '" said, however, that such witness marks could result from a ' "fatigued rear compliance mounting or a broken engine mounting. He did not think they would be caused by the misalignment of : the front sub-frame unless the misalignment was extreme. on Mr Ross agreed that the vehicle had been involved in "an accident which caused a "fair deal" of body damage. He would not agree that it was a major accident. 37. The question 15 whether it has been established that thers was a breach of the implied condition of merchantable quality. I accept the evidence of Mr Vawser and Mr Howson that there were very s3ianificant bends in the front body rails leading to a distortion cf the front sub-frame and, in consequence, a substantial misalignment of that sub-frame in relation to the rear sub-frame and the body of the vehicle generally and I so find. I also find that this condition rendered the vehicle unroadworthy and, in fact, unsafe. I also rely on the evidence of Mr Howard that there was a discrepancy between the right hand and left hand parallel measurements which he made of the vehicle in carrying out a test similar to the drop-line test described by Mr Ross. a discrepancy which he estimated at 15 millimetres and which was not challenged in ; cross-examination. I accept that evidence of Mr Howard which supports the findings I have made based on the evidence of Mr _ Vawser and Mr Howson. I am not prepared to make a positive finding, based as it would be "solely on Mr Howard's evidence, that there was a crease and split in the right hand body rail of the vehicle. I decline to make such a finding as such a crease or split was not observed by Mr Vawser or Mr Howson on their detailed inspection of the vehicle in circumstances which were obviously much more favourable to its detection than the difficult conditions under which Mr Howard was labouring, not having the use of a vehicle hoist. 38. I further find that the defects to which I have referred were present in the vehicle at the time when the vehicle was acquired by the applicant. I am satisfied that the defects discovered by Mr Vawser and Mr Howson could only have resulted from a very sericus accident and there is no suggestion in the evidence that the vehicle was involved in such an accident after 1t was delivered to the applicant. I should add that, in go far as the evidence of Mr Hobbs or Mr Ross is in conflict with that of Mr Vawser and Mr Howson, I do not accept it. In particular, I do not accept Mr Ross' evidence that the defects of which Mr Vawser and Mr Howson spoke could be overcome by adjustment of the panhard rod or the rear compliance mountings or both. That solution to the "problem was not put to Mr _ Vawser or Mr Howson in ross- examination and I, therefore, do not have the benefit of ! their response to it. But, having observed their demeanour in §, i tthe witness box and having regard to their knowledge and oc experience of Rolls-Royce vehicles, I am satisfied that, had .* Seither of them seen such adjustments as alleviating the reas * a ye A "zr problem, they would have said so. In any event, such adjustments would only be compensatory and would not remove or " "y * cure the "defects themselves. IT cannot accept that they would be appropriate in the case of such serious defects as were 39. Counsel for the first respondent submitted that it would not be safe for the Court to conclude that the defects identified by Mr Vawser and Mr Howson in fact existed because of the lack of evidence of handling difficulties in the driving of the vehicle and to the positive evidence given by Mr Hobbs, Mr Homeyer and Mr Ross that. when driving the vehicle, they were not conscious of any such difficulties. None of those witnesses had, however, driven the vehicle for any length of time and I am unable to regard the fact that they encountered no difficulties as warranting the rejection of the evidence of Mr Vawser and Mr Howson. In the result, I find that there was a beach of the implied condition of merchantable quality. Damages ry \ Having been informed of the condition of the vehicle as a result of the inspections carried out by Mr Vawser and Mr Howson, the applicant made no further payments under the hire purchase agreement with Mercantile Credits Limited. Although _ the applicant suggested that she may have made two of the monthly payments under the hire purchase agreement, the evidence does not establish that more than one such payment was made. 'In consequence of the applicant's default, the vehicle was repossessed apparently while it was still at the premises of James Somers and Co. Pty. Limited. 40. It was submitted by counsel for the applicant and not contested by counsel for the first respondent that the loss or damage suffered by reason of the breach of the implied condition that the vehicle was of merchantable quality was to be measured either by the cost of making good the defects in the vehicle or by the difference in the market value of the vehicle with and without the defects. No evidence was, however, put before the Court from which the difference in value attributable to the existence of the defects can be determined. And, although there is evidence, from Mr Vawser and Mr Howson as to the estimated cost to repair the defects, the applicant did not arrange for any repairs to be carried out before the vehicle was repossessed in consequence of her default under the hire purchase agreement. She is, therefore, unable to point to any expenditure as being the cost of carrying out any necessary repairs. re . 5 ~ In essence, what the'applicant seeks to recover is an amount ($14,000) equal to the amount described in the hire _purchase agreement as the deposit on the vehicle made up of $10,000 paid 'in cash or by cheque and $4,000 being the balance 9' the trade-in allowance of $21,000 after deducting therefrom the amount ($17,000) outstanding under the hire purchase . agreement with NRMA Finance Limited. The applicant did not "claim to recover from the first respondent an amount equal to aren the monthly payment made to Mercantile Credits Limited though tt was submitted that that sum should be regarded as providing 41. a reasonable adjustment for the fact that the applicant had the use of the vehicle for a period. Counsel for the first respondent referred to the provisions of s.75A of the Act and, in particular, to sub-s.3(b) therecf. Section 75A provides that, where a2 corporation supplies goods to a consumer in the course of a business and there is a breach of a condition that is implied in the contract for the supply of the goods by virtue of, inter alia, sub-s. 71{1) of the Act, the consumer is, subject to the section, entitled to rescind the contract. Where a contract has been so rescinded, the consumer may, by virtue of sub~s.3(b), recover from the corporation, as a debt, the amount or value of any consideration paid or provided by him for the goods. ' Ses It was submitted that, reading 83s.73 and 75A together, -the conclusion should' be reached that a consumer is not . entitled to recover by way of damages any amount which answers the description of "the amount or value of any consideration paid or provided by him for the goods". Any such amount must, $0 the argument ran, be recovered as a debt pursuant to s.75A. 4+ Allied to this argument was the further submission that the' -appliicant, by failing to exercise the right to rescind the hire - purchase agreement pursuant to s.75A, had failed to mitigate ce her damages. Counsel sought fupeert for these submissions in the decision of the Supreme Court of New South Wales (Rogers J.) in rt Austcalian Susrantee Torvoration Ett. v. Jennings C1983 1 NSWLR 50. There the Tou.t held 'hat the power ta rescind conferr2d by 3.758 was not linited £2 s1tuakion: where the y oan tne qoods hadi sassed te the consumes and. ct prope accordingly, a person was not disqualified from validly rescinding a leasing agreement in respect of goods pucsuant to that section by reason of the fact that the property in the goods had not passed to him. In the course of dealing with the submissions advanced by the company in support of the proposition that s.75A had no application to the transaction under consideration, Rogers J. at p.56 said: "Lastly, attention is drawn to the restricted field of a entities to whom the consumer may look for te, 'compensation by reason of s73 in cases of the hire or _ rental of goods. It is then submitted that it would be surprising if by the backdoor method of following 2 "the procedure provided by 375A, a consumer could obtain a remedy against a dealer Esic3i when s.73 : 'explicitly denies this opportunity. Once again, in my e | view, it would be to do violence to the intention of 'the legislature to seek to cut down the proper scope for the operation of the wide provisions of s75A by . reference to other unrelated provisions of the Act or - " .! presumptions, which do not find a ready accommodation . | with wide ranging consumer protection provisions. In _ / any event, s75A(4) expressly preserves all other remedies including remedies conferred by the Act. "in, "Section 75A ig just such a remedy. Furthermore, 373 ' "is directed to compensation for 'loss or damage'. The / 'payment directed by s75A(3)(b) is unrelated to any te ae or damage and is required to be made even in the .' absence of any identifiable loss or damage.' at ot 43. Counsel also referred to the decision of the Supreme Court of Queensland (Campbell J.) in Four Square Stores (Q1d.) Ltd. v. A.B.E, Copiers Ptv. Ltd. (1981) ATPR 40-232. In my opinion the submissions made on behalf of the farst respondent must be rejected. It 18 net unimportant to note that s.73 formed part of the Act when it was originally enacted in 1974 whereas s.75A was first enacted by the Trade Practices Act 1977 (Cth). The object of the latter section was to provide additional remedies to those already available under the Trade Practices Act 1974 (Cth) or under State or Territory law. That that was its object is made plain by sub-s.(4) which provides that the right of rescission conferred by the section is in addition to, and not in derogation of, any other right or remedy under the Act or any other Act, any State Act, any law wor SBetees we rho ae of a Territory or any rule of law. yofoe 1 ® In my opinion 3.75A 13 not to be read as in any sense "3 'limiting the right which s.73 confers. I can find nothing in the cases to which counsel for the first respondent referred "VEEN Wani.ch supports the submissions made. In circumstances such as those existing in this case, ss.73 and 75A confer on a consumer oS! different rights "against different parties and I can see no "justification for limiting the scope of the right given against Fore party by 'reason only of the circumstance that the right " given against another party has not been exercised. % se we ee ene - ~ - we kr ane aren . 44. The question remains what is the measure of the loss or damage suffered by the applicant as a result of the breach of the condition of merchantable quality. Doing the best I can with the material before the Couct. I assess that loss or damage at $10,000. That amount 18 recoverable from the iest respondent. Cross-claim The first respondent filed a cross-claim against the applicant alleging that it was a term and condition upon which Mercantile Credits Limited entered into the hire purchase agreement with the applicant that the first respondent "guaranteed the observance and performance by the applicant of Bee 'obligations pursuant to the agreement". It was further z io alleged that the first respondent, by a written guarantee dated 29 July, 1983, guaranteed to Mercantile Credits Limited the due " gbservarice * 'and performance Spy the applicarit of all her © eragcttona and the agreement and that, by reason of the applicant's failure to pay certain moneys owing to Mercantile i Credits Limited, the first respondent became liable to pay and - paid the sum of $37,000 to that company. The first respondent - claims $7,000 being the difference between the sum of $37.000 re a referred to" and the sum of $30,000 said to be the amount oe received on 'the sale of the vehicle. i rte! meetlee en a tbe athe wnt vie + SoTega ote ~~ : ee ' 45. The first respondent did not prove in evidence anv agreement in writing whereby 1t auaranteed to Mercantile Credits Limited the due observance and verformance by the applicant of the hire purchase agreement entered into py ner with that company. Indeed. the his pucchase agrsement in evidence. which is a printed form in which the nece u ary particulars have been inserted. has endorsed upon it a printed form of guarantee of performance but that quarantee has not been executed. The only evidence supporting the existence of an obligation on the first respondent to bind itself in any respect to Mercantile Credits Limited is the oral evidence of Mr Hobbs and the document Exhibit 3. Mr Hobbs' evidence was ta the effect that he informed Mr Wyatt on 20 July 1983 that he, Hobbs. would have to undertake to repurchase the vehicle if the applicant failed to fulfil _ per obligations under the hire purchase agreement. Exhibit $3 is a document headed "Schedule 'of Transaction" and is part of the documentation relating to 7 the hire purchase transaction. It is a printed form which is to be completed by the dealer. It contains, inter alia, a box moe within which 'are printed the following words: .. "ENDORSEMENT (if applicable) ends : "4. ¢ Subject to FULL RECOURSE "ett . REPURCHASE Delete endorsement which is not applicable." 46. The words "FULL RECOURSE" have been atruck out and Mr Hobbs' siqnature appears opposite the box ina space for "Dealer's Signature". The terms of what 15 referred to as the "endorsement" are not in evidence, Mr Hobbs save evidence that he was cequirea to repurchase the vehicle. He said that he paid "$37,000 and some odd dollars". His evidence continued: "Q. Once you had the vehicle in your possession what did you do with 1t? A. I wanted to wholesale it because I needed the money. I did not want to have that much money tied up in one car at that particular time. I was selling over at Tamworth, I needed the cash. . So you wholesaled the vehicle, did you? . That is correct. At the time you wholesaled it did you have another look at the car? Not really. Q A Q A 0. 'Who did you wholesale it to? A. Dennis West. Q "How much did you wholesale it to him for? A $30,000. Q A Why did not you wait until you could retail it? I could not afford to hold it at that particular time." "Me Dennis Roger West also gave evidence. He is a sar ; "Rotor vehicle buyer who at the relevant time was working "for xe ~ .<dohn Thompson Performance Cars at Burwood. He said that, on behalf of that firm, he purchased the vehicle from Chevelle Motors Pty. Limited on a wholesale basis. Asked what was the price he said: 47, "Well, I traded 3ome cara on the car so the car owed me $33,000. His evidence continued; "Q. When you say the car owed you $33,000 could you explain very briefly to the Court how that system operates? A. Yes. I had some vehicles that owed me X amount of dollars and I did a deal with Chevelle Motors and sold them some of my cars which owed me X amount of dollars and bought the Rolls- Royce, plus an amount of cash. so the amount the vehicle owed was $33,000. Q. Is it the case that when a deal is done like that in the moton industry either party in the transaction ~ the vehicle is expressed either more or less? A. Yes, it would be. Q. So if you say the vehicle cost you $33,000 is it necessarily the case that that means $33,000 changed hands? A. No, not necessarily, just an amount of cars plus cash. It might be just an amount of cars, 3 or 4 cars, or vice versa. Q. Do you know how much the deal was worth to the other side of the transaction? A. No, I do not." uF : He also said that the car was subsequently sold for $40,000, oot 4 Iam not satisfied on the material before the Court that the first respondent has established a basis for the claim s voat has made against the applicant. It has certainly not "established the 'claim as pleaded. Further, even if, contrary -7 '. to 'the view T have expressed, a foundation for a claim against the applicant has been made out, no satisfactory evidence has wt "been adduced from which the Court can conclude that the first respondent has suffered the loss or damage alleged or, indeed, any loss or damage. we me for the applicant agains $10,000. The application first respondent against is to pay the applicant's cross-claim. in so far as it seeks relief against dismissed as is the cross-claim by the the applicant. The first respondent costs of the application and of the I certify that this and the preceding 47 pages are a true copy of the Reasons for Judgment herein of the Honourable Mr Justice ' Neaves <b ate ssociate Dated: 10 January 1986