' a em JUDSMIET No. IS / BR IN THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY ) QLD G56 of 1986 IVISIO ) BETWEEN: COLIN GORDON McLEOD Applicant AND: GIBROSE PTY LTD First Respondent AND: P.L. PICKLES & CO PTY LTD Second Respondent MINUTES OF ORDER JUDGE MAKING ORDER: PINCUS J. DATE OF ORDER: 7 APRIL 1988 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. the respondents pay to the applicant the sum $4,000; 2. the respondents pay to the applicant his costs and incidental to the proceedings, to be taxed. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. of of IN THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY ) GENERAL DIVISION ) COLIN GORDON McLEOD GIBROSE PTY LTD PINCUS J. QLD G56 of 1986 Applicant First Respondent P.L. PICKLES & CO PTY LTD Second Respondent 7 APRIL 1988 EX TEMPORE REASONS FOR JUDGMENT This is a matter in which the McLeod, seeks damages for infringement of Trade Practices Act 1974. The applicant is vehicle at auction, the vehicle being an 1920s. The first respondent was the ve respondent the auctioneer. The first respo at a directions hearing which took place in subsequently taken part in the proceedings behalf of the applicants, seeks judgmen respondent in default of its having done so. applicant, Mr Colin ss.52 and 53 of the a purchaser of a motor old Sunbeam from the ndor and the second ndent was represented July 1986, but has not and Mr Sheaffe, on t against the first The second respondent has taken part in the proceedings and has been ably represented here by Mr Watson. The case, in essence, is simple enough, but it involves questions on which different minds might reach varying conclusions. I have reached firm conclusions on those matters and I think that it is right that I should express them now. The history of the matter is that the car in question was displayed at premises called the Suncoast Pioneer Village Museum for some considerable time, and in the display was represented to be "originally from Government House," or "Late Government House, Brisbane". It was put up for sale and the second respondent, a reputable company, caused to be prepared documents for the purpose of the auction. The documents of which the applicant complains against the second respondent were two: in one of them, which was variously described during the hearing but which I will call a booklet, the vehicle was lot 249 and was described as follows: "1925 SUNBEAM LANDAULET, six cylinder engine, Condition: Original and complete. This magnificent motor car was used as The Queensland Governor's State Car, and was garaged at Government House." In the other document of which the applicant complains a briefer description was given. It was simply described as: "1926 SUNBEAM limousine (Vice-Regal, Brisbane)". Now, the applicant saw an advertisement for the auction. He wrote away and he got back the document to which I have just referred, which I shall call the brochure which, as I mentioned, asserted that the vehicle in question was vice-regal. He had a look at the vehicle and noticed the _ signs which, one might say, reinforced the message as to the vehicle's history. However, although interested in the vehicle, he was unable to bid for it personally because of the necessity of travelling overseas on business. He gave instructions to his brother, Mr Ronald McLeod, to bid and Mr Ronald McLeod did so. The brothers say, and it is not really challenged, that the instructions were to go up to $15,000 or so. In fact, Mr Ronald McLeod decided to bid, and did successfully bid, $15,750. He had the booklet to which I have referred, and which contained the description I have mentioned. Now, it 1s not disputed that these descriptions were false. The vehicle was indeed a Sunbeam; it was not a Landaulet. It presumably had a six-cylinder engine; its condition was not original. It was never used as the Queensland Governor's car, and was not garaged at Government House at all. There 1s no explanation as to how these errors came about, except a partial one, and that is that the second respondent seems to have elaborated somewhat upon the bald description of the history which had been supplied by the vendor, the first respondent. The counsel for the second respondent has argued that the documents for which the second respondent was responsible had no inducing effect. That appears to me to be unlikely, on the face of it, and not to be so in fact. Obviously, any sensible person would regard the fact that the car had belonged to the Governor as adding interest to it, and the applicant so regarded it. A rather frivolous suggestion was made on behalf of the second respondent, that the history of the car would have nothing to do with its value. If that was so, one might inquire why so much emphasis was placed upon it in the booklet, being the catalogue, which was admittedly prepared by the second respondent. The other point taken by Mr Watson as to inducement was that, based upon answers given by the applicant, the sole inducement was the inspection of the vehicle. I do not think that is so, andI find to the contrary. As Mr Sheaffe says, the relevant misrepresentation does not have to be made by the' second respondent alone. In fact, in this case it was made first by the second respondent, before the inspection took place, andtI am satisfied that the booklet was also inducing, in the indirect sense, viz. that had 1t told a different story, no doubt the agent of the applicant would not have continued with the proposal to buy, which he was to carry out with the authority of the applicant. In short, I am satisfied that the vehicle was misrepresented by the second respondent, and that its misrepresentations were an inducing factor, although not the sole inducing factor. The second point which should be mentioned, taken by Mr Watson, was that, on his contention, the second respondent merely passed on information given by the vendor, and should not have reasonably been understood to have been doing anything more. Mr Watson referred me to the dictum of the High Court in Yorke v. Lucas (1985) 158 C.L.R. 661 at p.666, and in particular to the sentence: "That does not, however, mean that a corporation which purports to do no more than pass on information supplied by another must nevertheless be engaging in misleading or deceptive conduct if the information turns out to be false." The answer given by Mr Sheaffe is simple. He says the second respondent did not, in fact, and did not purport to do, more than pass on information as supplied by another, namely the first respondent. The High Court went on: "If the circumstances are such as to make ut apparent that the corporation 1s not the source of the information and that it expressly or impliedly disclaims any belief in its truth or falsity, merely passing it on for what it is worth, we very much doubt that the corporation can properly be said to be itself engaging in conduct that 15s misleading or deceptive." I can see that an auctioneer who is responsible for advertising articles said to be old or to have a particular origin or history or provenance may have problems in carrying out his primary commercial function of selling the vehicle at the best possible price, while avoiding infringement of the law. It is clear enough that he may do so; that is, the description may be given and not vouched for, and that can happen, for example, if the auctioneer says: we are told by the vendor that the history of the article is so and so; we are unable to say whether that is 50. However, statements of that sort, no doubt, would not encourage purchasers, and one finds, in practice, that the strategy adopted is too commonly of the sort used by the second respondent here. So far from suggesting, in the description in the brochure or the catalogue, that there was any doubt about the information supplied by the vendor that information was bolstered up and slightly exaggerated. What Mr Watson ultimately relied on, then, was the exclusion clauses in the documents. Three should be mentioned, firstly, a document signed as buyer's identification said: "I understand that the Terms and Conditions of this Auction Sale are displayed and I acknowledge that if I ama _ successful bidder I will be bound to purchase the items in accordance with the Terms and Conditions." Secondly, the terms and conditions, so far as I can make them out from the rather mixed-up copy supplied to me, say, in effect, that if the goods are not as described then nothing can be done about it. And thirdly, the booklet to which I have referred says in the front, under the heading "CONDITION": "Reference to condition of items contained in this catalogue has been supplied by the vendors." That, in fact, was not altogether so with respect to the vehicle in question. The notice went on - "Interpretation of 'condition' is a matter of opinion and intending buyers should satisfy themselves in this regard. In many cases we have only seen a photograph and we cannot guarantee whatsoever the description. Caveat emptor." One comes, inthe end, to the question which may be generalised in this way: if, so far from merely passing on what the vendor says, the auctioneer devises his own description, elaborating upon and giving added weight to the more skimpy information supplied by the vendor, does the operation of the statute fail because of what might be described as ordinary sorts of exclusion clauses? It seems to me clear enough, on the trend of the authorities, that it cannot do so. I do not think the High Court had in mind, in the passage to which I have referred, that a claim under s.52 could be ordinarily defeated by "common or garden" exclusion clauses, although the presence of such clauses may, in particular circumstances, help to enable the respondent to obtain a finding that the person allegedly in breach of s.52 was merely passing on information for what it was worth. It therefore appears to me that the applicant has established liability in the second respondent, and it also seems clear enough that the first respondent is liable. The next question in the case which has to be considered is one with which IT have had some difficulty, and that is the matter of assessment of damages. The evidence as to value has satisfied me that the price being paid was probably above market at the time when it was paid. However, that is of no consequence. The applicant was induced to pay that above-market price by the very misrepresentations complained of. The more difficult point is to determine the present value, and to determine whether that present value should be considered. Mr Sheaffe has argued that the proper course 1s simply to look at the value at the time of the purchase, which was 2 1/2 years ago, and compare that with the price then paid. On the other hand, Mr Watson has contended that since it is common ground that the value has increased substantially since the purchase, that should redound to the benefit of the respondents. If I accept Mr Watson's contention in that regard, there is still left the question of the way in which the adjustment should be made. It appears to me that it cannot be done with mathematical precision, but that if it is fair to take present value, some adjustment should be made for the decline in the value of the money which was paid; that is, the money which would be restored now is of less value than it would have been if restored in September 1985, at the time of purchase. On the whole, I think that Mr Watson's contention in this respect should be accepted, and that the Court should attempt to carry out the exercise I have mentioned, giving the respondents the benefit of augmentation in value since the purchase, but taking into account against them the decline in the value of the money. Mr Jacklin gave evidence that he thought the value of the car at present was $18,000 to $20,000. The value of his evidence, however, is somewhat diminished by the circumstance that he is an interested witness. Mr Neville Webb also gave evidence of value, and seems to me, with all respect to Mr Jacklin, to have been perhaps more impartial. Mr Webb's opinion was that the value of vehicles of this sort might have increased by something of the order of 30 per cent in the 2 1/2 years since the sale, which isa more substantial increase than the corresponding decline in the value of money. I can only go upon my impressions, and a basic but dim understanding of the reasons why people purchase these vehicles and the reasons for the interest in them in the community; I am of the opinion that the applicant would be adequately compensated by an award of damages inthe sum of $4,000. It will therefore be ordered: 1. that the respondents pay to the applicant the sum of $4,000; 10. 2. that the respondents pay to the applicant his costs of and incidental to the proceedings to be taxed. ' ce-tify that thic and'he GY orecedng --45 are a tru2 copy of the reasons for iit-ment herein of His Honour Mr Justice Pincus 4 ngekas Virs Ker Dated / April 1938