IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No.G 78 of 1986 } GENERAL DIVISION ) BETWEEN : ALANDREAMY PTY. LIMITED Applicant AND: THE STEWART CAR COMPANY (BANKSTA) PTY. LIMITED First Respondent AND: THE STEWART CAR COMPANY PTY. LIMITED Second Respondent CORAM: FOX J. DATE: 14 APRIL 1987 RET FOR JUDGMENT FOX J. The applicant sues in reliance upon s.53(b) of the Trade Practices Act 1974. Tts case is that on 21 October 1985 it purchased a Mercedes Benz 190E motor car from fs respondent, which is one of a group of companies ,(" engaged in the sale of cars. 1 Com eae At the time the car was delivered it appeaneditto everyone who had a look at it to be in new condition in all respects without any blemishes so far as its finish was * concerned. A few days later, however, Mr Mak, who took delivery of the vehicle on behalf of the applicant and who has thereafter used it, noticed after cleaning it that there was a small section on it which was slightly discoloured. He took the car back to Stewarts and pointed this out, and I think ome or two other very slight blemishes were observed at that time. The person inspecting 1f thought that it was a mark probably due to bird droppings and suggested that the matter be brought to attention when the car was brought in for servicinga. This happened in November 1985, but after the service, further discolouration on the bonnet was noticed. A close examination by experts then made it apparent that, on top of the baked enamel, which was the normal surface of the car, there had in the vicinity of the bonnet and the front mudguards been sprayed an acrylic paint. This was paint which. 1f not precisely the same as the enamel on the rest of the vehicle, accommodated itself to that colour in such a wav that nobody had theretofore noticed the difference. There was later discovered a deqree of lack of shine on the front of the bonnet, which was attributable to the fact that it was finished in paint and not enamel, but on this occasion there was nothina to be done except note the fact that there had been used this acrvlic paint, and the car was taken away by Mr Mak. He has in fact been using it for about 18 months. Apparently it 18 not easy to detect the difference in the colour ef the bonnet and mudguards from the rest of the colour of the e- car, although closer inspection, even by a lay person will show up some marks and, as I have said. probably will show up the lack of shine. There is no doubt that in the ordinary course a Mercedes Benz of this model would leave the factorv with baked enamel in the appropriate colour. Whether it was there or at some other place enroute to the Stewarts showroom that it was thought necessary to add the coat of paint is a matter of speculation. I am prepared to accept the evidence of the witness who said it did not occur in the showroom and it was most unlikely to have occurred at the Mercedes Benz import depot at Milperra. The fact is, on the evidence, that a vehicle is the subject of a close inspection at Milperra because it not infrequently happens in the course of transit that a car will suffer some damage as a result of which some work has to be done to put into saleable condition. The submission made by the applicant is that the defect was one which rendered the car other than new within the meaning of s.53(b). As the authorities show and as would in anv event be apparent, this is a matter of fact to be decided on all relevant considerations. One has indeed to start off with a contrast between the vehicle as sold and how it oriqinated. as, for example, how it left the place of manufacture. In other cases, a different comparison may be necessary, but the courts have so far thought, as appropriate, a comparison with the manufactured condition. It is perhaps unlikely that at Bremen in Germany, which is the place of manufacture of this model of Mercedes Benz car, that it was thought necessary or even permissible to add a coat of paint to the enamel. But, as I say, the matter is one of some speculation. The fact is, in the present case that the applicant ordered a new car and there was delivered to Mr Mak, acting on its behalf, a car which appeared to be new in ali relevant respects. The defect. as I think it might properly be regarded, in relation to the bonnet and the mudguards was. as has been said, of a latent nature. I do not think that improves the situation much, but it might throw some light ona _ proper conclusion as to whether the vehicle was new. There has been in the intervening years since the time of sale some degradation in the areas that I have mentioned due to the fact it was painted as well as enamelled, but as I understand, they have so far been pretty slight. At some staqe the defect will doubtless become more apparent. The degree to which the car varied from what was a normal enamelled car was at the time of supply very slight. There was a body of correspondence vassing between the parties or their solicitors for some time after the problem was identified and in the course of it Stewarts offered to take the vehicle back and restore it to what was assumed to be its normal proper condition, that is its enamelled state. That offer was accompanied, I think, with an offer to provide a free vehicle to Mr Mak or his company in the meantime. There were also other offers and one or more of them I 3 think came at or about or just after the time the present proceedings were commenced. One offer that was made was that the car be replaced on payment by the applicant company of the sum of $9000, but this was declined, and one would think understandably so. The sale of the car was accompanied by a warranty for three years, the details of which I do not think are in evidence, but in any event have not been discussed before me. I mention these matters because a question has been raised as to whether in any event the applicant could recover any damages against the respondents or either of them in relation to the matter itn question. I have made some passing observations on this question and I invited the parties to consider a settlement. IT will not add now to anvthing I then said. It seems to me however that the defect in question (regarding it as a defect) did not render the car other than new. I have indicated that it was seemingly a new vehicle when sold and showed very little change from the appearance of a new vehicle before the first service and, as I understand. has not shown any really substantial change since that time. If therefore am of the opinion that the case based upon s.53(b) fails. I should say that a number of other matters were pleaded but no reliance has been placed upon them and I have dealt with the only issue which has been the subject of debate. I am therefore of the opinion that the application should be dismissed with costs. (Discussion ensued) I will note that counsel for the applicant undertakes that the undertaking alreadv payment in full of the amount proceedings. Counsel for the Applicant: Solicitors for the Applicant: Counsel for the Respondent: Solicitors for the Respondent: Dates of hearing: given will be continued until of costs ordered to be paid in the I certify that this and the five (5) preceding pages are a true copy of the Reasons for Judgment herein of his Honour Mr. Justice Fox. (Hrdur Associate Dated: 14 April 1937 J. Glissan 9.C. & J. Onisforou Mr V. Tlic D.E. Grieve 9.C. & R.W.Hunt Kennedy Hannford & Associates 13, 14 April 1987