a Trad ractice - misleading or deceptive conduct - application under s.52 and accrued jurisdiction - sale of motor vehicle - alleaed representations by salesman as to condition of vehicle - whether misleading or deceptive - aaqreement to purchase expressed as subject to inspection on or before delivery - relevance of representations made between date of agreement and delivery - omission from statement of claim of particulars of certain representations relied upon by applicant - whether applicant bound by pleadings - relief appropriate Trade Practices Act 1974 ss.52, 53. 58 and 87 HOGARTH GALLERTES PTY. LIMITED v. CITY AUTOMOBILE HOLDINGS PTY. LTD. formerly DAVIS COLOUR DISPLAYS PTY. LIMITED t/a NEW ROWLEY MOTORS No. G146 of 1985 TOOHEY J. PERTH 27 MARCH 1986 kb fo wt ep cea oper oye ara wn Lotte ys IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION No. G146 of 1985 ey ewe BETWEEN: HOGARTH GALLERIES PTY. LIMITED Applicant and CITY AUTOMOBILE HOLDINGS PTY. LTD. formerly DAVIS COLOUR DISPLAYS PTY. LIMITED t/a NEW ROWLEY MOTORS Respondent MINUTE OF ORDER JUDGE MAKING ORDER: TOOHEY J. DATE OF ORDER: 27 March 1986 WHERE MADE: Perth THE COURT ORDERS THAT: The contract made by the applicant with the respondent for the purchase of Jaguar XJS Coupe registered number NUT 596 is void. The respondent repay to the applicant the sum of $21,000 paid by the applicant to the respondent as purchase price of the vehicle. The respondent pay to the applicant the sum of $2,100 as interest on the sum of $21,000. hic eee tens Sechandh 90 meemneneneanemeainaciannmaatanacce aimee tate amy ten tyson tree mote ey oe oe LP The respondent pav the applicant's costs of the application. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. ttt cn tena am aM ale ia owes eae wr Pon opens ~ Sen IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION No. G1l46 of 1985 poe ee anand BETWEEN HOGARTH GALLERIES PTY. LIMITED Applicant and CITY AUTOMOBILE HOLDINGS PTY. LTD. formerly DAVIS COLOUR DISPLAYS PTV. LIMITED t/a NEW ROWLEY MOTORS Respondent CORAM: ''TOOHEY J. 27 March 1986 REASONS FOR JUDGMENT These proceedings arise from the purchase by the applicant in May 1985 of a secondhand Jaguar XJS coupe, then registered no. NJT 596. The applicant alleges a breach by the respondent of ss.52, 53 and 58 of the Trade Practices Act 1974. It also alleges breach of contract and negligence on the part of the respondent. Pleadings were filed and at the instance of the parties directions were auiven for the filing of affidavits. It seems to have been contemplated bv the parties that there would be a trial on affidavit evidence. As it must have been anticipated that there would be a conflict of evidence as to what was said at the ey eB le te te te ey fits 2. time the motor vehicle was bought, a trial on affidavit evidence was hardly appropriate. As it turned out. most of the deponents of affidavits qave evidence either to amplify what appeared in their affidavits or because they were required to attend for cross-examination. Questions of credibility are involved and, for all practical purposes, the matter must be determined on oral evidence and exhibits. On the applicant's side. the principal witnesses relating to the purchase of the Jaquar were Clive Andreas Evatt, a barrister anda director of the applicant, his wife Elizabeth Margaret Evatt, who 1s also a director of the applicant, and Mr. Evatt's son Victor Raphael Evatt who was at the time a schoolboy. The applicant also called evidence of a technical nature relating to the vehicle. The respondent called a number of witnesses. John Frederick Howell was the manager of New Rowley Motors at Artarmon where the vehicle was bought. John Thomas Watterson was the respondent's sales representative at Artarmon. Both men spoke to Mr. Evatt, Mrs. Evatt and Victor Evatt in connection with the sale of the Jaquar. The respondent called other witnesses to give evidence of the condition of the Jaquar at the time of sale, of work done on it at the request of the applicant and of its condition thereafter. The story beaqins on 11 May 1985 when Mr. Evatt and Victor visited New Rowley Motors' premises at Artarmon. New Rowley Motors are Jaquar dealers. Mr. Evatt went there because he % a * was interested in buying a secondhand Jaquar though he had no particular vehicle in mind. Mr. Evatt said that he spoke to someone, whom he identified as Mr. Watterson, who showed hima green coloured Jaquar. It is necessary to set out his account of the conversation in tull: "I said to him, 'How old 1s this vehicle?' He said, 'It is 1978.' I said. 'It is seven years old. What is its condition like?' He said, 'It is in excellent condition'. I said to him, 'Do vou know anything about the car?' He said, 'Yes, I know the owner. I have known the owner since he got the car and I know all about the car. I know all about its history.' I said to him, 'Has it been involved in any accident?' I think I said, 'Has it been involved in any major accident?' He said, 'No, it has not. This car is in qoad condition.' I think that is the only conversation I had with Mr. Watterson, with the exception of signing an order form and paying a deposit. No, I beg your pardon, I said to him, 'IT want an NRMA inspection.' He said to me, "Yes, vou can have an NRMA inspection, but unfortunately there is something like a two-week delay in arranging these inspections because of the backlog of intending purchasers wanting inspections and you will not be able to get an inspection for two weeks.' I said, 'Well, if we buy the car and we do have an NRMA inspection after we buy the car, will you carry out all the repairs, if any, found necessary in the NRMA inspection?' He said, 'Yes, anv repairs required from the NRMA inspection we will carry out straicht away, but they will only be of a minor nature because the car, as I said, is in qood condition.'" Victor Evatt spoke of a conversation with Mr. Watterson in which the latter described the Jaguar as in "excellent condition, in good condition". He also recalled his father asking for an NRMA inspection and Mr. Watterson replying that there was a two week waiting period but that the car would be covered bya three month or 5,000 kilometre warranty and "any repairs needed would be fixed, seen to". Victor Evatt accompanied Mrs. Evatt to New Rowley Motors ona later occasion and I shall deal with that part of his evidence when I come to Mrs. Evatt's visit. 'wee nye Sty aoe in pore Mr. Evatt also spoke to Mr. Howell. The advertised price ot the vehicle was $23,000. Mr. Evatt offered $20,000 and was told that, if there was no trade-in. the respondent would accept $21,000, My. Evatt was uncertain whether the discussion over price was with Mr. Watterson or Mr. Howell. I am satisfied that it was with the latter. Mr. Evatt then siqned a retail buver's order form, expressed as a request to supply the applicant with the vehicle in question for a price of $21,000, payable as to a deposit of $100 with order (which Mr. Evatt then paid) and the balance at or before delivery. Mr. Watterson who completed details on the form, wrote below the reference to sale price: "Three Months or 5,000 KM Warranty as from time of Delivery 16/5/85". Below that he wrote: "Subject to Inspection on before Delivery". Mr. Howell's evidence was that it was he who spoke first to Mr. Evatt, although he is the manager of New Rowley Motors, Artarmon and Mr. Watterson is a sales representative. Mr. Howell said that he spoke to Mr. Evatt because the sales representatives were busy at the time. He then handed Mr. Evatt over to Mr. Watterson and did not speak to Mr. Evatt thereafter, either on that occasion or on any later occasion. ss oun ee = + wane movers ey wae vr pm ee pe we me ge 5. {n cross~examination Mr. Howell said that he made no representations about the vehicle to Mr. Evatt and f accept his denial. Perhaps not surprisingly. there was some confusion on the part of witnesses as to the precise sequence of events. However I am satisfied that Mr. Evatt's initial contact was with Mr. Howell but that it was only brief and that he was then handed over to Mr. Watterson who spoke to him at greater lenaqth and completed the retail buyer's order form. Mr. Watterson denied having said to Mr. Evatt or to Victor Evatt that the car was faultless or was in excellent condition or that he knew the previous owner personally or that he knew all about the vehicle or that it had not been involved in any major accident. Indeed he denied having made any of those statements to Mrs. Evatt as well. He agreed that he said that the respondent would give a three month or 5,000 kilometre warranty as from the time of delivery and that is why he wrote those words on the order form. He also agreed having said that the applicant could have an NRMA inspection and that the respondent would carry out any work or repairs recommended by that inspection. Mr. Watterson said that by saying the vehicle was subject to inspection, he meant that if, after the NRMA inspection, it was not approved by the applicant, the respondent would return the $100 deposit. He also invited Mr. Evatt to drive the vehicle and that invitation was accepted. In cross-examination Mr. Watterson confirmed his denials that he had made statements concerning the condition or history of the Jaquar other than: Aare eee "All £ did sav was that the car was in good condition for the age of the car". I make these findings concerning the visit to the respondent's premises on 11 May 1985: Mr. Watterson told Mr. Evatt that the Jaquar was in qood condition, that it was in excellent condition. I am not satisfied that Mr. Watterson qualified this representation with words such as "for the age of the car". Nevertheless, in assessing the implications of the representation, the age of the Jaquar must be taken into account. It was a 1977 model. Mr. Watterson adqreed that the applicant could have an NRMA inspection and that the respondent would carry out any work found by the NRMA to be necessary. I am not satisfied that Mr. Watterson told Mr. Evatt that he knew the previous owner of the Jaquar personally though it is probable that Mr. Watterson said something about the history of the car. Iam satisfied that Mr. Watterson told Mr. Evatt that the Jaquar had not been involved in any maior accident. I interpolate to say that there was no evidence that the Jaquar had ever been involved in a maior accident. There was a- Sop ears eee ey aces aad ne ' a evidence of paint work on the external panels. suggesting some panelbeatinga. Having reaard to the words on the order form "Subject to inspection on before delivery", I conclude that on 11 May 1985 the applicant aareed to buy the Jaquar for $21,000, subiect to a condition precedent that the applicant might refuse delivery and obtain a refund of deposit if dissatisfied with the vehicle's condition. Mrs. Evatt visited the respondent's premises on three occasions. The first occasion was some two days after her husband's visit of 11 May, which was on a weekend. She spoke to someone whom she thought was Mr. Watterson and she was taken by him to the workshop where there was work being done on the car. At this stage there had been no NRMA report on the vehicle. The car was being "detailed" i.e. being cleaned up and checked in accordance with the respondent's usual practice. It would seem that when Mr. Evatt saw the Jaquar on 11 May, it had just arrived and had not been cleaned or otherwise made ready for sale. Victor Evatt was with his stepmother on her first visit. He said that he pointed out a few rust spots and Mr. Watterson said they would be attended too. Mrs. Evatt and Victor returned to the respondent's premises the next day and on that occasion Mrs. Evatt took the vehicle for a test drive. Victor Evatt said that on this occasion 8. he noticed that the rust spots had been attended to but there were still a few other things to be done. On 17 Mav Mrs. Evatt again went to the respondent's premises, this time alone. She paid the balance of purchase price viz. $20,900 and took delivery of the Jaquar. In the first of several affidavits sworn by her in these proceedings, Mrs. Evatt deposed as follows: "4, Prior to the said delivery and purchase I had a number of conversations with Mr. Watterson wherein Mr. Watterson said words to the following effect 'The car is in excellent condition. I know the previous owner personally and I know all about the car. It has not been involved in any major accidents and is in really good condition. We will give you 3 months or 5,000 km warranty as from the time of delivery. You can have an NRMA inspection and we will carry out any work or repairs following this inspection. Unfortunately you cannot have an NRMA inspection before purchase because there is a two week wait for an NRMA inspector's appointment. The sale of the car is definitely subject to your inspection and approval. In my opinion the car is faultless'." The affidavit does not identify with any particularity when those conversations took place. But it would seen, from Mrs. Evatt's answers in cross-examination, that any significant conversation concerning the motor vehicle took place on the occasion she took it for atest drive. Mrs. Evatt was adamant that she was told by a man, whom she identified as Mr. Watterson, that in his opinion the Jaguar was "a very good vehicle". She said that she noticed a dent in the bonnet and that the man said to her "Well, it is, vou know, an aged - 7 or 8 years old - and vou cannot expect everything", to which she replied "Of nd wae are sa ue eee course not", She was adamant that Mr. Watterson had said that the car was in good condition, that he knew the car. that he knew the owner and that in his opinion it was in qood condition. She added: "T am absolutely certain he said Chat and I was very pleased and happy to hear that. He said that the owner had only sold the car because he was going to purchase anew Jaquar he was so pleased with Jaquars, so I was really happy to hear that from him". Mrs. Evatt was a credible witness and I accept her account of the conversation with an employee of the respondent who was, in all likelihood, Mr. Watterson. The latter denied he said he knew the previous owner. I accept that he did not know the owner but I am satisfied he said something that was reasonably understood by Mrs. Evatt to mean that he did know the owner. As mentioned earlier, Mrs. Evatt took delivery of the vehicle on 17 May. Some minor work had been carried out on the Jaquar but the warranty remained in force and the respondent did not suggest otherwise. In my opinion, the proper construction to place on the taking of delivery is this. The condition precedent was at an end; the warranty on the order form was operative and in addition there was a collateral warranty in the form of the undertaking qiven by Mr. Watterson that the respondent would attend to any work required by the NRMA. Before she took delivery of the Jaguar, Mrs. Evatt had rung the NRMA and was told that she would have to wait at least two weeks for an inspection. The inspection was carried lo. out on 28 May 1985 by Murray John Lowe, an inspecting engineer with the NRMA. Mr. Lowe took delivery of the Jaquar from the Evatts' home and took it back. Mrs. Evatt was not there when he returned but he left his report. It will be necessary to refer to Mr. Lowe's report in some detail later in these reasons. For present purposes it is enough to set out the summary with which the report begins: "A satisfactory vehicle displaying some qeneral wear and deterioration to various areas, as might be expected with aqe and mileage, and requires attention to the below listed items. and extensive body rust, to return it to a serviceable, roadworthy, condition". The day following receipt of the report, Mrs. Evatt telephoned Mr. Lowe and spoke to hin. She then rang the respondent and spoke to Mr. Howell, telling him that the NRMA report stated that there were a number of things to be done to the car. Mr. Howell told her to bring the vehicle in. On 31 May Mrs. Evatt set out to drive the Jaquar to the respondent's premises. She had difficulty in starting it but, in her words, "It did eventually go". However the vehicle seemed to lose power and at traffic lights it stopped and Mrs. Evatt got help to roll it into the kerb. She then rang the respondent and a tow-truck was sent to take the Jaquar to the respondent's premises. In the week beginning 3 June 1985 Mrs. Evatt spoke by telephone to officers of the respondent on several occasions. I accept that on one or more of those occasions she spoke to Mr. Howell though it is likely that on other occasions she In apegne cape see pe eee es ~ arty inne yee een er ll. spoke to someone elsc in the respondent's otfice. She told Mr. Howell that the inspector had said that the car was unroadworthy and structurally unsafe. Mr. Howell responded that he did not agree with the NRMA report. On one of these occasions Mrs. Evatt spoke to Mr. Gannon, the respondent's service manager. She said that Mr. Gannon commented "I know that Mr. Howell is very worried about the rust but don't quote me on this". Mr. Gannon agreed that he spoke by telephone with a woman who identified herself as Mrs. Evatt. She asked him "Have you seen the rust in my Jaguar car?", to which he replied "No. but I have been told about it". Mr. Gannon denied having said that Mr. Howell was worried about the rust but I accept Mrs. Evatt's evidence on this point. The last conversation Mrs. Evatt had with anyone in the respondent's employ was on 6 June 1985. That conversation was with Mr. Howell who told her that he would ring her back after he had spoken to Mr. Gannon. The Jaguar was still in the possession of the respondent as indeed it is at the present time. Thereafter events moved with surprising speed. The following day, 7 June, Mrs. Evatt swore an affidavit in support of the present application. It is of some interest that although Hogarth Galleries Pty. Ltd. is shown as the applicant in the title to the affidavit, no name appears against the respondent. Presumably there had been no time to ascertain the correct name of the seller. The retail buyer's order form appears to be a standard document with no identification of the seller. The application itself is dated 11 June though it was not filed until 12. l4 June. In an affidavit sworn 27 Junc 1985, Mrs. Evatt deposed as follows: "2. On or about 8 June 1985 the solicitors for the Respondent telephoned the solicitors for the Applicant and said words to the effect that the Respondent would carry out all necessary repairs to the motor vehicle and would then submit the car to a further NRMA inspection." It was not made clear how the respondent''s solicitors knew as early as 8 June that the applicant had consulted solicitors. The respondent arranged for a further inspection by the NRMA and that inspection was carried out on 25 dune by Mr. Lowe who had made the earlier inspection. His report, to which further reference will be made later, shows that a number of the items previously listed for repair had been attended to but that some still required attention. Of course by that time proceedings had been instituted though no defence was filed until 19 September. As it happened, on the day on which the defence was filed another NRMA inspector Mark Phillip Salkeld carried out an inspection of the Jaguar. This was done at the respondent's request. His report will be referred to later in these reasons. To bring the story up-to-date, registration of the Jaquar expired and Mr. Golding, j1oint managing director of City Automobile Holdings Pty. Ltd. returned the plates to the Department of Motor Transport. He said that he did this deliberately so that it would be necessary for the vehicle to pass the scrutiny of the department before it could be re-registered. —_ wet tree yty aN os 13. On 25 November 1985 the Jaquar was inspected bv the department and new plates issued. The vehicle is currentiv registered NSU 939. I turn now to the condition of the Jaquar at the time of sale and subsequently. As to its condition at the time of sale, I accept the evidence of Mr. Lowe. It is true that he does not have formal qualifications for certifying the roadworthiness of vehicles. But he was so qualified in New Zealand and his qualifications in this country as a mechanic and his experience with the NRMA enabled him to speak with authority on the matters in his reports. Reference has already been made to the summary appearing at the outset in Mr. Lowe's report of 28 May 1985. In oral evidence Mr. Lowe described "satisfactory vehicle" as meaning "not beyond repair". He said "It is reasonable at this stage, however, as the summary would carry on, it describes further how the vehicle is". In Mr. Lowe's opinion the most serious aspect of the vehicle was rust in its main structural members. He described this in the following terms: "There was extensive rust, and by that I mean rust holes in the front floorpan areas, around the jacking points and also in the front hinge pillars, which are a structural component, at the sill panel joints. They were the main areas of the rust". Mr. Lowe considered that the rust made the vehicle structurally unsound, meaning it was unfit for re-reqistration and for use on the roads. Other matters he observed of a serious nature were "general oil leaks from the engine, transmission and the final epee es 14, drive assembly and power stecrina". Loss of fluid in the steering system would make the vehicle a hazard on the road. As to oil leaks 1n the enqune, transmissiom and final drive assembly. Mr. Lowe said that the vehicle was "actually dropping oil on the roadway". This was not so much a hazard as a bar to re-reaistration. Mr. Lowe thought that next in order of serlousness were the front suspension mountinags and suspension bushes which had deteriorated and the mountings had actually separated at the rear of the front cross-member. Sufficient deterioration could constitute the vehicle a hazard. Fluid was leaking from the brake master cylinder which could lead to partial failure of the braking system. The front suspension upper inner control bushes had deteriorated. These are rubber insulators which perish with age and when they do perish they cause excessive movement which can in turn lead to damage to the mounting pins and associated parts of the vehicle. In cross-examination Mr. Lowe repeated that by "satisfactory" he meant no more than that the vehicle was serviceable. Mr. Lowe agreed that, toa degree, most of the matters referred to by him in his report were the subject of general wear and tear. But I understood him to put the matter of rust in a different cateqory. Dealing with his inspection of the vehicle on 25 June 1985, Mr. Lowe noted that a number of repairs had been carried out. For instance the front and rear mountings on the front suspension cross-member had been renewed as had certain control arm bushes. However there was still leakage of fluid from the — 15. power steerage svstcm and no work appeared to have heen done on this. Nor had the oil leakage been rectified. Some rust repair work had been carried out around the front tacking points but. in Mr. Lowe's opinion, work needed to be done to the other rust affected areas. Mr. Salkeld carried out his inspection on 2 July 1985, that is just over a week after Mr. lLowe's re-inspection. Mr. Salkeld had been an inspector with the NRMA for some ten years. He also had formal qualifications and experience asa motor mechanic. There are some difficulties in making a direct comparison between Mr. Lowe's reports and Mr. Salkeld's report. Mr. Lowe used the form of "Used Car Inspection Report" and "Re-inspection Report". Mr. Salkeld used the "Owner's Report on the Mechanical Condition of a Motor Vehicle" which has some differences and seems more designed for an assessment of what needs to be done under a contractual or statutory warranty. The form of Mr. Salkeld's report contains provision for identifying essential repairs and also a sheet headed "Explanations". This sheet identifies the motor vehicle by reference to various components such as under car and body structure, front and rear suspension and steering, wheels and brakes, engine and cooling system, electrical system and transmission. A tick against any of these items reflects the inspector's assessment, not that the item is perfect, but that "it was considered acceptable". A cross indicates that some repair is required. - Mr. Salkeld listed 21 items as requiring attention. Some of these e.g. ,ow ort me 16. "rectify operation of cigar liahter" were obviously minor. Some, while not maior items. clearly called for attention. Freeing up the left window winder, rectifving the operation of the horn and renewing a tarnished headlight reflector, I take to be in this category. Other items were more serious. I include in these the followina: 6 Eliminate oil leakage at final drive inspection cover 7 Renew tailshaft rear universal joint (worn) 8 Eliminate fluid leakage at rear of transmission 9 Eliminate oil leakage at engine sump and oil cooler hoses 1l Treat advanced corrosion at underside of right door and at lower area of both door apertures at weather seal recess and at lower front corner of right front door aperture 12 Fit serviceable tyres to rear wheels (worn to leqal limit at inner edges) 15 Eliminate abnormal free-play at left upper control arm inner bushes 17 Treat corrosion at underside front of right front floorpan at area of recent repair 18 Check and adjust front wheel alignment (uneven tyre wear) 20 Eliminate cause of excessive engine timing chain operational noise. 17. In cross-examination Mr. Salkcld was taken to Mr. Lowe's reports. Referred to Mr. Lowe's description of the Jaquar as not being in a roadworthy condition. he commented: "Well, on some of those items, ves, you would have to savy that, simply because there are certain items there that would prohibit the vehicle passing registration check at that time". This was a reference to Mr. Lowe's first report. As to the second report, Mr. Salkeld said: "Again there are some items om there that again could cause the vehicle to be rejected on a detailed inspection for registration". Mr. Salkeld was not surprised to find, in a car of the Jaguar's age, the items he considered required repair. He said that oi11 leakage was a particular problem with Jaguars, at least on earlier models such as this one. In the light of Mr. Lowe's and Mr. Salkeld's reports, it would have been misleading to describe the Jaguar onil1l May, indeed at any time during May 1985, as in excellent condition, even having reqard to its age. The particular defects observed by Mr. Lowe and Mr. Salkeld may not have been all that unusual but thev give the lie to a description of the vehicle as in excellent condition. Rust, o11 leakage and fluid leakage were the major problems and they still existed (although some work had been done on the rusted areas) when Mr. Salkeld carried out his inspection on 2 July. Indeed, at the time of sale the Jaquar was in an re Te wo; as atten n Y ' 18. unroadworthy condition in the sense that it would not have met the Department of Motor Transport's standards for re-reqaistration. There was evidence from Mr. Gannon of work done on the Jaguar. Some of this work was done in the service department of New Rowley Motors at Artarmon and is the subject of an invoice dated 31 May 1985. The work was described in this way by Mr. Gannon: "There are ignition components, suspension components, a globe, brake pads, mounting brackets, a throttle cable; so that type of work was performed: front suspension work, ignition svstem in the enqine. The front brake pads were replaced apparently - ves". Mr. Gannon said that he arranged for rust rectification to be carried out by Lee Smash Repairs. Mr. Gannon did not inspect the vehicle after its return from that repairer. Mr. Salkeld's report indicates that work was done on the rust areas though rust was not entirely eliminated. After the Jaquar came back from Lee Smash Repairs, more work was done on it as a result of Mr. Salkeld's report. The work is the subject of an internal invoice dated 30 July 1985 and was described by Mr. Gannon in this way: "The parts booked out on the back here refer to camshaft cover seal gaskets, so the first work - the major work that was done was to oil leaks on the camcovers of the vehicle and to the oil pump housing of the vehicle and the kickdown switch was fitted." In fact the work was more extensive than described by Mr. Gannon and continued until 23 Auqust. so wep eee ee a Pot tere "4 "hoy There was evidence, both affidavit and oral. from Messrs. Bostelmann, Lister and Golding who are respectively the qeneral service manager of City Automobile Holdings Pty. Limited, joint managing director of New Rowley Motors and joint managing director of City Automobile Holdinas Pty. Limited. Mr. Bostelmann is a qualified motor mechanic with long experience and is a certified motor vehicle examiner, able to certify new and used cars for registration by the Department of Motor Transport. On 30 January 1986 Mr. Bostelmann arranged for the Jaquar to be placed on a hoist where it was inspected by Mr. Lister and by him. Mr. Bostelmann had with him the three NRMA reports and he said he paid particular attention to the re-inspection report of 25 June 1985. Mr. Bostelmann said that he checked all matters set out in that report, closely inspecting the engine bay, the outside of the transmission casing and front-end suspension. He said there was no serious leaking of fluid from any of the major components of the vehicle and such minor faults as were apparent were entirely consistent with its age and mileage. It is desirable to set out verbatim some paraqraphs from Mr. Bostelmann's affidavit sworn 11 February 1986: "11 I also inspected and checked the panels on the Motor Vehicle in particular the beaver panels and skirting the jacking points and the interior floor pian. All panels were solid and there was only minor rust on the inside of the interior floor. This rust is surface rust and has no effect whatever on the structure of the vehicle and Jaguar vehicles after a few vears almost always have this condition. 12 I drove the Motor Vehicle and tested it. It drove perfectly straight, was solid on the road and 20. performed faultlessly under both pedal and hand t brakes. : 14 os. have absolutely no doubt this Jaquar is a structurally sound and perfectly roadworthy. It complied with all of the requirements of the ~ Department of Motor Transport for registration and ' I would have no hesitation in certifying the . vehicle for registration. . 15 Having regard to its age I consider the vehicle to be 2n a sound and roadworthy condition." ; Mr. Lister gave evidence corroborating that of Mr. : Bostelmann. He spoke of his long experience with Jaquars and other luxury motor vehicles. In an affidavit filed in these ' proceedinas Mr. Lister deposed: "16 In my opinion the Jaquar is perfectly sound. I am of the view that the Retail Asking Price of the t vehicle is 23,000 dollars or 24,000 dollars and ! it should not be sold for less than 21,000 dollars L at Retail and I would be quite happy to have it in i Stock. . 17 At no stage did Mr. Evatt contact me about this vehicle. It is the firm policy of the Directors of it this Company who are myself, Mr. F.R. Golding and : Sydney Barrister and businessman Mr. Andrew Davis i to attend to and rectify any customers' complaints. $ We have at all times been ready to do so for Mr. f i | Evatt but have never been given that opportunity by him. If he had approached the Directors of the Company we would have certainly fixed his complaints and lent him a vehicle whilst the repairs were being done. No such opportunity was given to us and these proceedings were commenced without any prior notice." Reference has already been made to Mr. Goldina's wee eG ee water evidence relating to re-registration of the vehicle. He repeated Mr. Lister's assurance that had Mr. or Mrs. Evatt contacted him, Soa, the respondent would have fixed anv complaints and lent them a car ~y oe eee ee al. while repairs were being carricd out. In an affidavit sworn 11 February 1986, Mr. Goldina deposed: "8 bee I have carefully examined the Jaguar NSU 939 (formally NUT 596) and have formed an opinion of ats value. It is a qood sound vehicle and if it were offered for sale at Rowlev Motors we would offer it for sale at $23,000 and would be prepared to accept a cash offer of $21,000". There was no substantial challenge to the evidence of Messrs. Bostelmann, Lister and Golding. I must therefore conclude that the Jaquar is now in qood condition for its age and roadworthy and that it has passed the requirements of the Department of Motor Transport for re-registration. Of course the issue is not the present condition of the vehicle but its condition at the time it was sold and what was then said about it. That is not to say that the present condition of the vehicle is irrelevant for it may throw some light upon its condition in May 1985. But is is apparent that a great deal of work was done on the Jaquar after that time. The statement of claim pleads that between 11 and 17 May 1985 the respondent made representations to the applicant concerning the Jaquar. Curiously, the only representations particularised are those said to have been made to Mrs. Evatt though they are in terms similar to those made to Mr. Evatt and his son. Counsel for the respondent submitted that the contract for the sale of the Jaquar was made on 11 May 1985, that nothing said by the respondent thereafter could give rise to a cause of action and that, the applicant pleading only what was said to Mrs. Evatt, the application must fail in any event. tw Wl I do not accept this submission. Counsel for the applicant arqued that because the affidavits filed included what was said on 11 May L985 and no particulars had been sought by the respondent, the Court should have reqard to anything said by the respondent concerning the condition of the vehicle to Mr. Evatt, and to Mrs. Evatt. I do not find it necessary to determine this issue. The function of pleadings is to define the issues between the parties. If a partv is dissatisfied with the other party's pleading, he may seek particulars or in an appropriate case apply to have the pleading struck out. So far as the pleadings are concerned, the respondent was entitled to assume that the representations relied upon were those pleaded with some particularity as having been made to Mrs. Evatt. On the other hand, affidavits were sworn by Mr. Evatt and Victor and it was clearly the intention of the applicant to rely upon those affidavits and the oral evidence of those witnesses. No objection was taken to the affidavits or the oral evidence of those witnesses on the ground of irrelevancy and the respondent was content to meet the applicant on the ground the latter had chosen. In those circumstances I would be minded, even at this stage and subject to questions of costs, to permit the applicant to amend 1ts statement of claim to plead representations made to Mr. Evatt on 11 May 1985. But I do not think this is necessary. The aqreement made on 11 May was subject toa condition precedent which operated until 17 May when Mrs. Evatt took deliverv of the vehicle. Before she took deliverv, she was told by Mr. Watterson amiss oe - W : meee Sore se ee ce 23. that the Jaquar was in excellent condition. For reasons mentioned earlier, this constituted misleading conduct on the part of the respondent. The Jaquar was not in excellent condition. In mv view, 1t is no answer to a claim made under 5.52 of the Trade Practices Act to point to a warranty given by the seller and for the seller to express his willingness to abide by the terms of the warranty. If a buver has a cause of action under s.52 or under any other relevant section of the Act, he is entitled to pursue his remedies under the Act. One of those remedies is, by reason of s.87, an order declaring the contract to be void and directing a refund of money. In my view that is the appropriate relief to be granted in the present case, having regard to the nature and extent of items requiring attention. The application as filed sought in the alternative an order that the respondent carry out repairs to the vehicle to make it roadworthy and in qood condition. When the hearing began that claim was abandoned. The respondent has had the applicant''s $21,000 since May 1985 and, qood cause not having been shown to the contrary, the respondent should pay interest on that sum. Federal Court of Australia Act 1976 s.51A. No evidence or argument was offered to the Court as to an appropriate rate of interest; in the circumstances I fix 12%. See by way of illustration Jones v. South British Insurance Co. Ltd. (1984) 53 A.L.R. 408. I quantify interest at $2,100. ere ~ —— — --— 24. The applicant made a claim for what was described as demurrage, being the cost of taxi fares through inability to make use of the vehicle and also rent for parking facilities. In mv view none of the amount claimed is recoverable. Iam not persuaded that anv loss was sustained by the applicant as opposed to loss incurred bv Mr. Evatt in endaqging taxis which were for the most part required in connection with his practice as a barrister. As to the parking facilities. he needed to maintain these in any event: to lose them would mean that 1t would be very difficult for him to obtain parking space in the future. Counsel for the respondent submitted that if the applicant should succeed, it should pay the respondent's costs, alternatively that each party should pay its own costs. The basis of this submission was that the applicant had moved too quickly and had brought proceedings at atime when the respondent was expressing a continuing willingness to carry out the work thought necessary by the NRMA. I have some sympathy with this submission but I do not think it should prevail. The applicant had a cause of action under the Trade Practices Act which it was entitled to pursue and as part of that claim to ask for the return of the purchase price it had paid. At no time did the respondent offer to take back the vehicle though one would think, in the light of what was said by Mr. Lister and Mr. Golding, that the respondent would have suffered no real loss had it done so. Furthermore, the respondent's defence denied making the alleged representations, pleading in the alternative that 1f they were made they were true. Se . texyra gro Are PTT oT oo a ita Inoeateennnt aneaicaetiieeneietit te rw 25. Thus the lines were drawn between the parties at an earlv staqce. CE. Walter v. Steinkopff (1892) 3 Ch. 489. The hearing of the claim beqan 1n Svdnev on 17 October 1985. As 2i1t happened, I was in Svdney at the time and aqreed to take the case on the assurance by the parties' ledqal representatives that it would not last more than a day. That optimism was ill-founded as appeared very quickly, given the areas of factual dispute between the parties. It was not possible to find a further hearing date suitable to counsel until 17 February 1986. When the hearing began, the respondent's affidavits were confined to those of Messrs. Watterson, Howell and Salkeld. It was not until the end of January 1986 that the Jaguar was inspected by Messrs. Bostelmann and Lister and the affidavits of those gentlemen as well as the affidavit of Mr. Golding were not sworn until 11 February. It was only just before the resumed hearing 1n February that the applicant's solicitors were provided with the additional affidavits. Whether earlier notification to the applicant's solicitors would have helped to resolve this matter without a further hearing is something on which I should not speculate. But it mav have served some useful purpose for the applicant to have been told of the re-registration of the vehicle in November 1985. In all the circumstances, costs should follow the event. I certify that this and the preceding twenty-four pages are a true copy of the reasons for judgment herein of his Honour Mr. Justice Toohey. Associate Dated: oJ Marck ; 9 § 4 ; woe, yee - ox