HO yoo CATCHWORODS TRADE PRACTICES - false or misleading statements concerning purchase of water slide - whether slide covered by manufacturer's warranty - whether 1t was built to specifications - whether applicant induced by representations. Trade Practices Act 1974 - ss.52, 53(q) and 84(2). N.T. AQUATICS PTY. LTD. Applicant - and - CIANTUP PTY. LTD. First Respondent STATE BANK OF SOUTH AUSTRALIA Second Respondent BILL HOLMAN Third Respondent ADELAIDE FISHER J. 5 NOVEMBER 15986 So ee ee ~ aware: IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY No.S.A. of G25 1986 GENERAL DIVISION BETWEEN: . N.T. AQUATICS PTY. LTD. Applicant - and - CIANIUP PTY. LTD First Respondent STATE BANK OF SOUTH AUSTRALIA Second Respondent BILL HOLMAN Third Respondent MINUTE OF ORDER JUDGE MAKING ORDER : FISHER J. WHERE MADE ADELAIDE DATE OF ORDER 5 NOVEMBER 1986 THE COURT ORDERS THAT: 1. The application be dismissed. 2. The applicant pay the first respondent its costs, the same to be taxed if not agreed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. a eli -o i a. yee cna aM for n nee er T Sart Son, Se ipeyrenyrinyns Soeyceey core 2 oon dg ares F oo eye a i emt eee IN THE FEDERAL COURT OF AUSTRALTA ) ) SOUTH AUSTRALIA DISTRICT REGISTRY ) No.S.A. G25 of 1986 ) ) GENERAL DIVISION BETWEEN: N.T. AQUATICS PTY. LTD. Applicant - and - CIANTUP PTY. LTD. First Respondent STATE BANK OF SOUTH AUSTRALTA Second Respondent BILL HOLMAN Third Respondent CORAM: FISHER J. 5 NOVEMBER 1986 REASONS FOR JUDGMENT These proceedings arise out of negotiations leading up to the sale by Cianiup Pty. Ltd. ("the vendor company") of certain plant and equipment comprising two water slides to N.T. Aquatics Ptv. Ltd. ("the applicant"). The only reason for the presence of the State Bank of South Australia ("the Bank") as a respondent was a desire on the part of the applicant to ensure that the Bank refrained from making a further payment to the vendor company under a guarantee it gave of payments by the applicant of instalments of purchase price. An order to this iy RE Prrmite =P we oe opp eee 2. effect was made shortly after the proceedings commenced and the Bank was not further involved in the action. The third respondent ("Mr. Holman") was alleged to be involved, in accordance with 5.75B of the Trade Practices Act 1974 ("the Act"), in certain contraventions of that Act with which the vendor company was charged. All parties sought an expedited hearing of the proceedings not only because the applicant desired to obtain urgent relief but also because Mr. DiNola, a dQirector of the vendor company, planned a trip overseas for a considerable period of time. The application was filed on 10 June 1986, and the hearing of the action commenced on 8 September and concluded on 19 September 1986. The parties by agreement limited generally that hearing to the question of contraventions of the Act and entitlement to relief. The assessment of any loss which would have required much additional evidence was postponed until the question of liability was decided. The applicant in its pleadings contended that the vendor company had in the course of negotiations contravened s.52 and sub.s.53(q) of the Act. The vendor company was alleged to have engaged on a number of occasions in conduct which was misleading or deceptive or which was likely to mislead or deceive (5.52) and to have made a false or misleading statement concerning the existence or effect of a warranty (sub.5.53(g)). I propose to deal in the first instance with the alleged contravention of Wyre ee ee - te RT te er reve es a roa 3. s.52, and thereafter with sub.s.53(q). The applicant's statement of claim pleaded facts on the basis of which it sought to establish misrepresentations by or on behalf of the vendor company on four topics. It is desirable to refer to portions of the statement of claim, paraphrasing where necessary, because the evidence of the applicant's witnesses departed substantially from the pleadings. The statement of claim was amended on a number of occasions but I refer to it as finally amended on 6 September 1986, two days before trial. The facts pleaded in respect of each of these representations are conveniently dealt with separately and it is further alleged that each representation was made in order to induce the applicant to purchase the water slides. The applicant alleged, in its statement of claim, that the vendor company and Mr. Holman as its agent, orally represented to it that the water slides were subject to a ten year warranty of which there were six years left to run. This representation was alleged to have been made prior to and during the month of October 1985 in Perth by Mr. DiNola and Mr. Holman. This representation was also alleged to have been made in the period June 1983 to April 1986 orally by Mr. Holman. In relation to this warranty the applicant pleaded an additional representation which was in writing and which appeared in an advertising document authorized by the vendor company. This document it was alleged came into the possession of the D y no eee | STE rr rr ee soe eng rt oo ert Soe oe pet wee ns or - omy yar = eae applicant in September 1985. It contained the following statement: ".,..the water slides themselves are subject to a ten year manufacturers' warranty of which there is st1i1l six years to run." Another representation was alleged to have been made Orally at the same times and by the same persons as above to the effect that the original moulds used in the manufacture of the said water slides were available and would be delivered to the applicant. Two further representations were alleged to have been made orally by Mr. DiNola prior to and during the month of October 1985 in Perth, namely that the water slides had heen constructed strictly in accordance with engineering drawings and specifications and that they carried an engineer's certifificate for wind loading and terrain factors suitable for installation on site at Alice Springs in the Northern Territory. The first of these two representations was also alleged to have been made by an engineer, Mr. Stone, in or about the second week of March 1986 to Mr. Nesbitt. The applicant further pleaded that since making the agreement for purchase of the slides each of the representations had been discovered to be untrue and that acting on the truth of the representations and induced thereby it had agreed to purchase, removed the slides to Alice Springs and paid oe 5. instalments of purchase money. It was also pleaded that the vendor company had failed to deliver to the applicant the manufacturer's warranty and the original moulds. It is pertinent to note that inno instance was there any evidence that these oral representations were made by Mr. DiNola on the dates alleged. The proceedings arise out of the following circumstances. The applicant is a company incorporated in the Northern Territory which carries on business as a member of a group of companies involved in the leisure business. Members of the group construct fibreglass and concrete swimming pools and spas. In 1982 the applicant investigated the possibility of establishing an aquatic centre in Alice Springs which would comprise water slides, swimming pools, barbecue facilites, bumper boats and spas. Under instructions from Mr. John Gary Nesbitt (Mr. Nesbitt"), a director of the applicant, a firm of accountants in Alice Springs prepared a feasability study into a family water recreation centre. Stage 1 of the proposed complex was planned to include water slides, the cost of which was estimated to be $300,000. Early in 1983 Mr. Nesbitt was in touch with Fairmile Pty. Ltd. ("Fairmile") a company in Western Australia concerning the purchase of water slides. By letter dated 18 April 1983 he agreed in principle to purchase water slides from Fairmile which were located and operating at the Aqua Thrillway, Fremantle, for $375,000 subject to inspection and subject to finance. There was no reference in the letter to any 6. of the topics concerning which representations were alleged to have later been made. Mr. Holman, a director of Fairmile Pty. Ltd., was present when Mr. Nesbitt inspected the slides on the succeeding weekend. When they saw certain repairs on the slides, Mr. Nesbitt's evidence was that Mr. Holman said that the repairs were covered by a warranty. He denied that Mr. Holman said that the repairs were "fixed" under a warranty. However it was conceded that the topic of a warranty was mentioned on this occasion by Mr. Holman, although it cannot be said that at this stage he made this statement as agent for the vendor company or "on behalf of" or with its consent for the purposes of sub.s.94(2) of the Act. That company did not purchase the water Blides from Fairmile until the following year. The applicant paid a deposit which was however refunded to it when the deal did not proceed because finance was not available. In November 1985 Mr. Nesbitt contacted a Mr. Williams, a leisure consultant in Adelaide, concerning the purchase of an existing slide. Mr. Williams sent to Alice Springs a number of tender applications relating to sales of water slides. These had been obtained from the City of Mount Gambier. One of these documents ("the Conti document") related to the water slides the subject of these proceedings. It was conceded that this document had been distributed by or on behalf of the vendor company with the authority of Mr. Di Nola, a director of that company, which had in 1984 purchased the slides from Fairmile. It was in the following terms: atm —- -—-- 7. FOR SALE BY TENDER PLANT AND EQUIPMENT "AQUA THRILLWAY" (FREMANTLE) We are pleased to offer for sale the 'AQUA THRILLWAY (FREMANTLE) plant and equipment as specified in the brochure enclosed, for dismantling and re-location. The twin slides together with the equipment described are being offered for sale by tender. 'AQUA THRILLWAY (FREMANTLE) is approximately 4 years' old and has a replacement cost in excess of $650,000. The water slides themselves are subject to a 10-year manufacturers' warranty of which there is still 6 years to run. THIS Is AN EXCELLENT OPPORTUNITY FOR THE INVESTOR/DEVELOPER WHO HAS A SUITABLE LOCATION TO PURCHASE THIS FIRST-CLASS EQUIPMENT AT A FRACTION OF THE REPLACEMENT COST. Interested parties should contact PAUL CONTI on (09)3287688 or after hours (09)2717855 (reverse charge calls accepted) for copy of Conditions of Sale by Tender and Form of Tender. Tenders close at 4 p.m. Monday, 30th September 1985," Mr. Nesbitt saw this document and set about making enquiries whether it was for sale. He said ona number of occasions in his evidence that in seeking to purchase an existing slide he was acting contrary to the advice of Mr. Williams who tried to convince him to buy a new slide through him. These statements are inconsistent with the evidence of Mr. Williams who said he recommended that Mr. Nesbitt go ahead with the purchase of the subject slides. Mr. Nesbitt telephoned Mr. DiNola on or about 27 November 1985 at the Aqua Thrillway complex in Fremantle. He ee ee A 2, we te ee mene at eee pees 8. was asked in evidence in chief what he said to Mr. DiNola. He answered "I asked Franco if the water slide was still for sale because I had known that there was an auction going on and I did not know if it had been sold". An important question on this -aspect of the proceedings was whether Mr. Nesbitt informed Mr. DiNola that he had read the Conti document. Mr. Nesbitt agreed that he did not tell Mr. DiNola that he had read it but his counsel contended that by the use of the words "because I had known there was an auction going on and I did not know if it had been sold" Myr. Nesbitt had indirectly drawn this fact to Mr. DiNola's attention. However I am not prepared to accept that Mr. Nesbitt said these words to Mr. DiNola. But even if he did say these words, they were insufficient to put Mr. DiNola on notice that Mr. Nesbitt had seen and was relying upon the representation concerning a warranty in the Conti document. Mr. Nesbitt was a witness who frequently did not answer a question and was always inclined instead to state his thought processes and arguments. Mr. DiNola informed Mr. Nesbitt that the slide was still for sale but that a number of things had been removed from the original inventory. Mr. Nesbitt said Mr. DiNola told him that Mr. Holman, who was in Queensland, was helping him to sell the slides and knew the full details. He also said Mr. DiNola gave him Mr. Holman's telephone number. Both Mr. DiNola and Mr. Holman said that Mr. Nesbitt was interested in acquiring bumper boats from Mr. Holman and this was the reason for Mr. Nesbitt's approaches to Mr. Holman. Mr. Nesbitt said he immediately wot ogre ee eee eae E r ' L ! ' t corer ee ne 9. telephoned Mr. Holman but this was incorrect in that Mr. Holman was in the United States at that time. Mr. Nesbitt had thereafter a number of telephone conversations with Mr. Holman which I will later relate. He had no further telephone conversations with Mr. DiNola, on his evidence, until just before Christmas. There is therefore not a tittle of evidence to support the applicant's pleading in the statement of claim that "prior to or during the month of October 1985 in Perth in conversation betwen Frank DiNola ... and John Garry Nesbitt..." Mr. DiNola made a statement to Mr. Nesbitt concerning a warranty, and in particular a warranty with a number of years to run, or concerning the availability of moulds. Mr. Nesbitt did not meet Mr. DiNola in Perth or elsewhere in 1985 and on no occasion thereafter did Mr. DiNola mention anything concerning the fact that a warranty had a number of years to run. Mr. Nesbitt said that the next event which occurred was that in late November or early December 1985 Mr. Williams and a Mr. McDonald visited him in Alice Springs, bringing with them prices for new slides. He said that after discussions with these two men he made a decision to purchase the vendor company's slides. However after his evidence was concluded he returned to the witness box ta say that having seen the air tickets of Mr. Williams and Mr. McDonald he realized that his evidence concerning the date of this visit was incorrect. They had met him in Alice Springs on 4 February 1986, which was thus subsequent and not prior to his inspection on 27 January of the oe ee 1% «mete ay woe 10. water slides in Fremantle with Mr. DiNola. The fact that Mr. Nesbitt was so confused in remembering the sequence of events which occurred only late last year and early this year, supports my Opinion that his evidence requires corroboration. Mr. Nesbitt said he had a number of telephone conversations with Mr. DiNola prior to Christmas 1985 but no reference was made to any of the four topics heing the subject matter of the alleged misrepresentations except that Mr. DiNola did make reference to the moulds. In response toa statement made by Mr. Nesbitt that he believed the moulds were available from Mr. Holman, he replied "yes of course". On 27 January 19896 Mr. Nesbitt met Mr. DiNola on the site of the Aqua Thrillway and together they inspected the equipment. He said that he pointed out to Mr. DiNola the bumps and patchings on the slides and the latter replied that they had not got any worse, that they had been repaired, not to worry about them, there was a warranty still on then. Mr. DiNola then said that he had not had any problem with them. There was nothing more said about a warranty on that occasion and nothing about the moulds. Further discussion took place concerning the payment of purchase price, the fact that Mr. DiNola wanted an agreement in writing as people in China were interested and that he wanted to close the slides to the public as summer was ending. It is significant that again Mr. Nesbitt made no reference to having seen the warranty in the Conti document or the period of the warranty. Furthermore the topic of a warranty was not brought up by him but by Mr. DiNola noe er ro rr neem et ~F 11. in veference to certain repairs which had taken place in earlier years. Mr. Nesbitt's amended evidence concerning the date of Mr. Williams' visit to Alice Springs established that it occurred shortly after his return from Fremantle to Alice Springs. On 11 February 1986 after that visit he wrote to Mr. DiNola a letter in the following terms: "Further to my visit and discussions regardeing (sic) the purchase of your water slide. We have agreed to purchase 1t at $225,000. This price includes all inventory as discussed. If you require any further information please contact the undersigned." On Saturday 1 March 1986 Mr. Nesbitt telephoned Mr. DiNola from Mr. Williams' office in Adelaide. The telephone had a loud speaker attached which enabled Mr. Williams to hear the conversations. The principal matter of discussion, both on that occasion and on earlier telephone calls between Mr. Nesbitt and Mr. DiNola, was the cost of dismantling, transport and erection of the equipment in Alice Springs. Mr. Nesbitt was contemplating bringing his own engineer down from Alice Springs to Fremantle but Mr. DiNola said he would arrange for Stone & Associates, the original engineers for the erection of the Aqua Thrillway to be present and that this would save Mr. Nesbitt expense. There was no mention in the conversation with Mr. DiNola of the warranty. However on the same occasion he rang Mr. Holman nd i c t t- \ f , us et Saati oe yoo One Pra 12. concerning the costs of dismantling. Mr. Holman alleged to have said during the conversation "well, the moulds are available and by all means you can have the moulds to rectify any damages you may have". It was only when asked by his counsel whether the warranty was a topic of conversation that he replied that he said to Mr. Holman "The warranty still exists?" and he said "Yes". Mr. Williams' evidence was to much the same effect. Nothing more was said on the topic by Mr. Nesbitt to Mr. Holman and in particular why it was mentioned at all and whether and for what reason Mr. Nesbitt was at the time attaching significance to the warranty. If he had considered its existence a matter of importance one would have thought he would have checked for example the duration of the warranty and what was covered by it. On 17 March 1986 Mr. Nesbitt was at the site at Fremantle, where he met Mr. Stone who had been asked by Mr. DiNola to be present. Mr. Nesbitt said he asked for and obtained certain drawings from Mr. Stone. Mr. DiNola was present during discussions between Mr. Stone and Mr. Nesbitt but there was no suggestion that Mr. DiNola said anything on the topic of the construction of the slides being in accordance with drawings and specifications and the existence of an Engineer's Certificate for wind loading and terrain factors. Likewise there was no evidence at all to suggest that representations on these topics or either of them were made by Mr. DiNola prior to and during the month of October 1985. In each instance the evidence completely failed to support the pleadings. 13. Mr. Stone gave evidence which I accept without reservation concerning these two alleged representations. However the essential fact is that whatever he may have said or done would not in my opinion amount to conduct of the vendor company by virtue of the provisions of sub.s.84(2). He did not attend "on behalf of" the vendor company and certainly could not be said to have been the agent of that company. He was not employed or engaged by that company but was present because Mr. Nesbitt accepted Mr. DiNola's suggestion. His evidence was to the effect that he did tell Mr. Nesbitt that the slides were constructed in accordance with the drawings and specifications which he handed to hin. He did not say that the slides were built for cyclonic areas like Darwin and therefore there would be no problem in erecting them in Alice Springs. Nor had he been asked to issue an engineer's certificate in relation to the slides. Mr. Nesbitt said that on the following day he went with Mr. DiNola to the office of the latter's solicitor where an agreement for sale and purchase was prepared. However he later agreed that he was mistaken and that the visit took place shortly before noon on the same day as the conversation with Mr. Stone. Both Mr. DiNola and his solicitor gave evidence as to what happened at that office and each confirmed the other's evidence. Mr. Nesbitt denied that there was any mention of the warranty at the meeting whereas both of the others present said that Mr. Nesbitt did refer ta the warranty at the time when the exclusion we Treg cps ooo eer fovea fe aga was ' ay ae eae 14. of a vendor's warranty was under discussion. The solicitor said that Mr. Nesbitt made a comment in relation to a manufacturer's warranty to which Mr. DiNola said "Yes, of course [ will try and get it for you". He also said that Mr. Nesbitt said nothing at the interview which indicated to him that he attached any great importance to the manufacturer's warranty. The solicitor''s evidence 15 confirmatory of Mr. DiNola's recollection which was to the effect that Mr. Nesbitt said "But I recall there was a manufacturer's warranty on these" to which Mr. DiNola answered "Probably yes, and if it exists I would be very ready to pass it fo you". The balance of the happenings can be shortly stated. Mr. Nesbitt gave Mr. DiNola a number of post-dated cheques for the instalments of purchase money and signed the agreement hoth as a witness to the seal of the applicant and for himself as guarantor, The agreements were sealed in Alice Springs by the applicant and signed by another guarantor. A bank guarantee of the payment of the instalments was obtained at the insistence of the vendor company from the State Bank. Mr. Nesbitt spent the next 10 days or so dismantling the water slides which were transported to Alice Springs. He said that on occasions during those days he made reference to the matter of the warranty and the moulds to Mr. DiNola but that nothing of significance was said by either side. I did not find Mr. Nesbitt's evidence at all convincing cae +e et ee eee oe TR apne 2 ee ee Se oe 15. on matters of business detail or dates. I do not say that he lied or attempted to mislead the Court. He gave the impression of a hardworking practical man with more interest in action than in Matters of business er documentation. He was impatient of documents and detail, particularly of dates and sequences of happenings. His attempts to recollect and reconstruct were full of inconsistencies and contradictions. His evidence was contradictory of what was alleged in the pleadings and also of what he said in an affidavit sworn in support of the application to the Court. His story was only to a very slight extent corroborated by the evidence of other witnesses all of whom gave evidence more acceptable than his. There is no doubt that the topics of a manufacturer's warranty and the moulds did come up on various occasions in discussion. However at no stage did he indicate to either Mr. DiNola or Mr. Holman that he attached great or in fact any significance to such a warranty. I accept the evidence of Mr. DiNola where it conflicts with that of Mr. Nesbitt. He was a more careful and businesslike witness. It is necessary to consider each of the representations and whether, standing alone or together, I am satisfied on the evidence that the vendor company contravened the provisions of 8.52 of the Act. There was no dispute that that company was engaged in trade or commerce and there is no need to reiterate yet again the relevant principles. In respect of the statements concerning the existence IO sya tere - soe ore ey 4 oly af t ry w ne ' 16. and availability of the moulds this contention became a dead issue prior to the conclusion of the hearing. Mr. Nesbitt conceded that he was satisfied that the moulds were in existence and that they would be made available to him. His only concern was he said, that he did not have an assurance in writing to this effect, a very uncharacteristic concern on his part because he was invariably impatient of documents. There is no basis for a finding that in this regard the vandor company has contravened 5.52 of the Act. In respect of the two allegations concerning the construction of the slides and the existence of an engineer's certificate for wind loading and terrain factors there is no support in the evidence for the contention that Mr. DiNola made such representations or either of them. If they were made, they were made by Mr. Stone at the meeting on site on 17 March 1986. His conduct can only be the conduct of the vendor company if it 1s deemed so to be by sub.s.84(2) of the Act. However as already mentioned, in making statements, he was not an agent and did not engage in any conduct "on behalf of the vendor company or with its consent or agreement, express or implied". He was in no way acting, whether ostensibly or otherwise, on behalf of that company. Therefore 1t is unnecessary for me to give detailed consideration to the statements which he made. It is sufficient for me to say that I would not find that he made representations such as alleged in the statement of claim. Furthermore to the extent that he made any statements concerning the construction terme cena ae yo a ; et fee a are is ~ a eee 17. and erection of the slides, I reject the contention that they were false. The question of the falsity of the alleged statement concerning the existence of an engineer's certificate was deferred for later consideration but such evidence as I have does not support the applicant's case. These two alleged misrepresentations are not made out and I dismiss them. The matter of the manufacturer's warranty is more difficult and it is necessary to reiterate my findings of fact in this regard. The first mention of a warranty occurred on the occasion of the visit by Mr. Nesbitt to the site of the slides in Fremantle ain April 1983. The warranty was mentioned when certain repairs were noticed. However whatever statement was made on this occasion by Mr. Holman can not be deemed to be conduct of the vendor company. Moreover there was no evidence that the statement that the repairs were covered by a warranty was incorrect. This aspect of the case can therefore he disregarded except to the extent that Mr. Nesbitt did become aware of the existence of a warranty at this early stage. As far as Mr. DiNola was concerned I find that the question of a warranty was mentioned by him in the presence of Mr. Nesbitt on two occasions. The first was when Mr. Nesbitt drew attention on the occasion of his inspection on 27 January 1986 to the repairs to the slides. Mr. Nesbitt said that Mr. DiNola said "not to worry about them, there was a warranty still on them". Mr. DiNola's evidence was that he said "I think there ssahec Sinan a wes 18. is in existence a warranty for the acrylic part of the flumes". I prefer Mr. DiNola's version of this conversation. Mr. Nesbitt said that he was aware at that time of the statement concerning the warranty in the Conti document. However he made no mention of this fact to Mr. DiNola who referred on his own initiative to the topic of a warranty. It was in response to a comment from Mr. Nesbitt concerning repairs and he made no further reference to the topic on this or any other occasion in his discussions with Mr. DiNola. I find also that the topic of a warranty was brought up by Mr. Nesbitt at the meeting in the solicitor's office on 17 March 1986. Notwithstanding Mr. Nesbitt''s evidence to the contrary, I find it was brought up at this time when Mr. Nesbitt had already agreed to buy the slides and when the exclusion of vendor's warranties was being discussed. Mr. Nesbitt did not agree that this occurred but I have no doubt that it did at the time when he thought, incorrectly, that the solicitor was referring to a manufacturer's warranty. I accept Mr. DiNola's version of each of these conversations to the effect that he thought there was a manufacturer''s warranty and would see if he could obtain it. Some considerable time later a search made at the home of Mr. Holman's parents in Perth produced a document to the effect that there had been a manufacturer's warranty for the period of one year. There was also evidence from Mr. Nesbitt that Mr. Holman made certain statements concerning the warranty in telephone conversations with him in 1985 and 1986. I am not satisfied, in ware au . - , -t pr ope Jeg hk a sarast aT re Nem, " an 19. the light of a denial by Mr. Holman, that any such statement was made prior to the telephone conversation on 1 March 1986 in the presence of Mr. Williams. With some reservations I am prepared to make the finding that Mr. Holman confirmed on that occasion the existence of a warranty. Both Mr. Nesbitt and Mr. Williams gave evidence to this effect. The applicant's counsel did not press the contention that Mr. Holman was acting as the agent of the applicant but sought to call inaid the provisions of sub.s.84(2). If successful in this regard the conduct of Mr. Holman would be deemed to be the conduct of the vendor company. The question ain this matter under sub.s.84(2) can he stated as follows: Was Mr. Holman acting at the direction of or with the consent (express or implied) of Mr. DiNola when he made a statement concerning the warranty and if so could it he said it was made on behalf of the vendor company. There was evidence which might be said to support a positive finding. Mr. Nesbitt said Mr. DiNola gave him Mr. Holman's telephone number in Queensland and was told to obtain information about the slides from him. However I accept Mr. DiNola's evidence that Mr. Nesbitt was told the telephone number for the purpose of enabling him to obtain information about bumper boats. I am not prepared to find that Mr. DiNola allowed the impression to be given that Mr. Holman was authorised to make statements on his or the vendor company's behalf generally concerning the slides. Certainly Mr. Holman had a personal interest in the slides being sold as soon as possible and for as high a price as possible because this va Meee ne te ae Mw ote tere 20. would assist to resolve existing litigation in which Mr. DiNola or the vendor company and Mr. Holman were involved. Also Mr. DiNoela arranged for advertisments to be published in Queensland by Mr. Holman in relation to the sale and Mr. Holman himself published one advertisement. However in relation to any statement about the water slides in my opinion Mr. Holman was acting on his own behalf. He had a personal interest in the sale of the slides, and had first hand knowledge concerning the existence of a warranty. Furthermore Mr. Holman had in 1983 initially told Mr. Nesbitt of the existence of the warranty and in my opinion any subsequent statements he made to Mr. Nesbitt were confirmatory to Mr. Nesbitt of that earlier intimation. rt is in this regard significant that Mr. Neshitt did not make any mention to Mr. Holman of the oral statement concerning a warranty by Mr. DiNola or the fact that he had seen the Conti document. I am therefore not prepared to find that Mr. Holman's statement was made on behalf of the vendor company whether with the express oar implied consent of Mr. DiNola or otherwise. His statement on lL March 1986 cannot therefore be deemed under sub.s.84(2) to be conduct of the vendor company. My conclusion is that I am not prepared to find that the statements made by Mr. DiNola and Mr. Holman establish that the vendor company contravened 5.52 of the Act. I need say no more concerning the statements of Mr. Holman because of my earlier finding that his conduct is not deemed to be the conduct of the vendor company. a ay TATSNET O er sre my tenn fon Pe, ae scape ae — zy = ropes 21. In my opinion the statement made by Mr. DiNola on 27 January 1986 considered objectively was neither misleading nor deceptive nor likely to misiead or deceive. It was a mere statement of an opinion which he volunteered when the topic of repairs was raised. I consider that Mr. DiNola's statement at the solicitor's office on17 March 1986 is confirmatory of the fact that he was stating an opinion and not asserting a fact. It is however possible that Mr. Nesbitt understood the statement in the context of the Conti document or the earlier reference by Mr. Holman in 1983. If this was the case Mr. Nesbitt failed to take reasonable care of his own interests in that he failed to take the matter further with Mr. DiNola. If he was a prudent purchaser attaching significance to the warranty he would have told Mr. DiNola that he had seen the Conti document and would have made enquiries. However in my view the more likely Situation is that at the time he attached no particular significance to the existence of a warranty. I consider this aspect of the matter further when I come to the question of inducement. Turning to the Conti document and the allegation that it contravened sub.s.53(g) of the Act, it cannot be disputed that it contained a false statement concerning the existence of a warranty. The applicant pleaded that this document came to the notice of Mr. Nesbitt in the middle of 1985. However the evidence satisfies me that he did not see it until the month of November that year by which time tenders had closed. I have 296 qe we ree Pied oe iin ener 22. already rejected the contention that statements by Mr. DiNola and Mr. Holman should be assessed in conjunction with or in the context of the Conti document in relation to the alleged contravention of 5.52. The statement in the document however contravened sub.s.53{g) although counsel for the vendor company contended that in this regard it contained a representation which was limited in time, namely 30 September 1985, limited as to the class of representees and limited in 1ts effect, namely to promote interest and invitations. Alternatively he contended that it was qualified or withdrawn by the happenings at the solicitor''s office on 17 March 1986. These are difficult questions but because I am strongly of opinion that the applicant was not induced by this advertisement to purchase I can proceed on the assumption that a contravention has occurred. I am prepared to accept that, with the knowledge of the warranty as specified in the Conti document, the applicant could have attached greater significance to the statements by Mr. DiNola and Mr. Holman concerning a Warranty than they appreciated. However I am not prepared to find that any of these statements induced it to buy, thereby rendering the vendor company liable pursuant to sub.s.82(1) of the Act to compensate it for any loss it suffered. Mr. Nesbitt's case was that the warranty was crucial because its existence justified him purchasing existing equipment rather than the new equipment for which Mr. Williams was pressing. He said he wanted the warranty because Mr. Williams was giving him a "hard time" and was ae mm mney nn ' ar nae ee, . . Me a «. sore me te 23. "putting on the screws". However Mr. Williams' evidence does not support this contention. He denied that he was doing otherwise than recommending the purchase of the Fremantle equipment. I cannot accept this explanation by Mr. Nesbitt of why he attached significance to the existence of a manufacturer's warranty. There are a number of further grounds upon which I would find that he attached little, if any, significance and that its existence played no part in his decision to purchase. He prepared to purchase the equipment in early 1983 without reference to a warranty. A number of the statements in 1985 and 1986 upon which he purported to rely were made subsequent to his decision to buy in early February 19986. There was no contemporaneous evidence that during the negotiations he attached any significant at all to its existence. He did not tell Mr. DiNola that he had read the Conti document nor did he take the initiative to ask Mr. DiNola whether there was a manufacturer's warranty in existence and if so its terms and conditions. When Me DiNola mentioned the warranty during the inspection on 27 January 1986 Mr. Nesbitt did not take up the topic in any way. Certainly he made no reference to a warranty in his letter of 12 February 1986 when he agreed to purchase. Iam not prepared to make a finding in the applicant's favour that it was induced to purchase by any representation concerning a warranty. In its pleadings the applicant contended that it was induced by the four representations to purchase. However in his mre OT rye te ance = wooed aye mye gee ee ae 7 BA ' pon poten a 24, evidence Mr. Nesbitt said that it was the favourable price, the fact that the slides were operating and the existence of a warranty which persuaded him to buy. The applicant's failure to establish the other matters upon which it contended it relied encourages one to be sceptical of its contention that it was induced to purchase by any representation concerning a warranty. It is my firm view that the attaching of great significance to a warranty is a "recent invention" to bolster up a contention that the applicant was misied thereby to its detriment. In the circumstances the application must be dismissed with costs. Mr. Holman has already by consent been dismissed from the proceedings. I certify that this and the 23 preceding pages are a true copy of the Reasons for Judgment of Mr Justice Fisher. Associate hi: , ad Las Dated: st Nov (986 ay ion al Sd meus BO TT a et eee