Local Court of New South Wales CITATION: Tsoutsouras v Wilson [2007] NSWLC 24 JURISDICTION: Civil PARTIES: Stanley Tsoutsouras Matthew Wilson FILE NUMBER: 7523/06 PLACE OF HEARING: Downing Centre Local Court DATE OF DECISION: 07/13/2007 MAGISTRATE: Magsitrate B A Lulham CATCHWORDS: Contract - Sale of Goods Act - whether sale by description - 1972 Ford Falcon GT Sedan LEGISLATION CITED: Sale of Goods Act 1923 (NSW) s 18 Fair Trading Act 1987 (NSW) ss 40, 42 CASES CITED: Toll v Alphapharm (2004) 219 CLR 164 Grant v Australian Knitting Mills Limited & Anor 54 CLR 50 Mr Young (Counsel for the Plaintiff) Harris & Company (Solicitors for the Plaintiff) REPRESENTATION: Defendant self represented ORDERS: Judgment for the defendant Reasons for Decision BACKGROUND TO DISPUTE 1 In early February 2005 Stanley Tsoutsouras (hereinafter referred to as 'the plaintiff') read an advertisement in the February 9th edition of Unique Cars for a Ford sedan as follows: Ford Falcon GT 1972. 351CI.5. 8 litre, four speed manual, 780 with manual choke, red/black, sedan, LSD, spoiler, competition brake callipers, anti tramp rods. LHF462. Phone 0409112196 Vic $32,000. 2 The plaintiff rang the number and spoke to the car's owner Matthew Wilson (hereinafter referred to as 'the defendant'). The two men discussed the genuineness of the car. The plaintiff agreed to purchase it for $28,000. and arranged for the vehicle to be collected in Victoria and brought to Sydney. Some twelve months later the plaintiff attempted to sell the vehicle and was told by prospective purchasers that it was not a genuine 1972 Ford Falcon GT. Expert evidence established that the vehicle was not a genuine 1972 Ford Falcon GT sedan. Such evidence also established that if it was a genuine 1972 Ford Falcon GT it would be worth $50,000, but instead was worth $11,000. The plaintiff sued for the difference of $39,000 plus some other expenses for repainting, repairing and collecting the vehicle from Victoria, making a total claim of $45,118.50. THE ISSUES 3 The determination of the plaintiff's claim will involve the determination of the following issues: (i) What were the terms of the agreement for the sale of the vehicle? (ii) Was the sale a sale by description, so as to enable the purchaser to rely on the provisions of s 18 of the Sale of Goods Act (NSW) and s 40P of the Fair Trading Act (NSW)? (iii) Did the defendant negligently represent that the vehicle was a genuine XA GT Falcon? (iv) If the defendant did represent that the vehicle was a genuine XA GT Falcon, was the defendant guilty of misleading or deceptive conduct within the meaning of s 42 of the Fair Trading Act (NSW)? EVIDENCE RE AGREEMENT FOR SALE 4 The plaintiff relied on his Affidavit sworn 15 March 2007 (Exh.1). He deposed the following evidence in relation to the purchase of the vehicle; "I said: "I am calling about the ad for the Falcon GT in Unique Cars. Is it a genuine XA GT? A person whose voice I now recognise to be Matthew Wilson ("Wilson") said: "Yes it is a genuine Falcon XA GT." I said: "Has it ever been in an accident?" Wilson said: "No. I've owned the car for 2 years and the previous owner was my mate and he had it for 8 years. My mate bought it from the original owner. I'm the third owner and the car's been unregistered for some time now." I said: "So is it a genuine complete car?" Wilson said: "Yes." I said: "I said what's the bottom price?" Wilson said: "$28,000." I said: "In that case, I won't even negotiate. It's a genuine car. Give me your bank details and I'll arrange for the money to be deposited into your account". 5 In a further Affidavit of 9 May 2007 he deposed that the only conversation he had with the defendant prior to purchasing the vehicle was as set out above. 6 The defendant relied on his Affidavit of 17 April 2007. He referred to having a number of telephone calls with the plaintiff's brother and then having a number of telephone calls from the plaintiff. The defendant said that the plaintiff had asked him a series of questions about the vehicle, including whether the vehicle was an original GT. The defendant did not give evidence in direct speech but deposed at para 4b of his Affidavit (Exh.6) the following; b. I said words to the effect that: i. I myself had purchased the car on the basis that it was an original and as far as I knew, it was, but I had never made any checks or enquiries in that regard beyond asking the person that I bought the vehicle from whether it was an original; ii. I had never had the vehicle checked by a professional to determine whether it was a original GT; iii. I described the features of the vehicle which were as set out in the advertisement; iv. I suggested that he arrange for checks to be made to determine whether the vehicle was in fact an original GT; v. I suggested that he inspect the vehicle in person. c. Mr Tsoutsouras replied with words to the effect that it was not worth his time to do so. d. Mr Tsoutsouras offered a price of $28,000, which I accepted on the basis that: i. the sale monies were paid electronically into my bank account that day, and ii. Mr Tsoutsouras arrange for shipping from Victoria. 7 Mr Wilson appeared in person. He cross examined the plaintiff. The plaintiff agreed that he had telephoned the defendant more than twice on the one night to persuade him to sell the car to him (Tp7, L30): 8 Mr Wilson asked the plaintiff whether in the phone calls Mr Tsoutsouras had asked Mr Wilson repeatedly if the car was the real thing. Mr Tsoutsouras agreed and said Mr Wilson had said "Yeh, it's the real thing, it's a GT, it's a Falcon GT" (Tp7, L55). 9 Mr Wilson put the following questions and obtained the following evidence from Mr Tsoutsouras (T.p8); Q. Do you recall my suggesting that it would be wise to inspect the car yourself or have someone you know and trust to do it for you? A. No. Q. Do you remember myself expressing to you that it looks, sounds and goes like a Falcon GT that had been good enough for me to date and that I had never done any in depth checks of a formal nature on the car? A. Do I remember? Q. Yeh? A. Yeh. Q. You remember me telling you that? A. Yeh. Q. Do you recall me telling you that I was of the thinking that a serious GT enthusiast would surely inspect the vehicle first before any money changed hands? A. A serious enthusiast and what did I say to you? Q. You said? A. By the time I come to inspect that car the car would probably get sold. Q. Do you recall from the phone call Stan, my offer to take a deposit from you to hold the car until you can inspect it personally and that your answer to me was "it's not worth your time". A. It's not worth my time, I don't recall that. 10 Mr Wilson was cross examined by Mr Young Counsel for the plaintiff. He said that he purchased the Falcon in 1997 for $13,500. He said he took the vendor's assurance that the car was genuine. It was put to Mr Wilson that he realised that if the car was not genuine its value would be substantially less than that. He answer "that is true, but" (Tp14,L20); "I was not in a position financially to have in depth checks done on it and I was willing to negotiate on the price, as its been proven, and I expected the purchaser to do checks." 11 It was suggested to Mr Wilson (T08/06, p15); Q. That's why, isn't it Mr Wilson, that when you had a conversation with the plaintiff you were anxious to ensure that the plaintiff believed it was genuine? A. Well I did not try to talk him into it, I said that he should check that I had not done checks myself. 12 It was put to Mr Wilson that he had said "it was genuine" he replied "I said that I'd never checked". The following further evidence was given (T08/06, p16,L10); Q. At no stage during the telephone conversation you had with Mr Tsoutsouras did you say to him that he should make his own inquiries as to the genuineness of the vehicle? A. That is not true. Q. And that you made it very plain to him that the vehicle was genuine, that's right? A. I tried to say that as far as was concerned it was the real thing. Q. And that was the furthest you went wasn't it Mr Wilson. You didn't tell him to make his own inquiries is that right? A. No that's not true. Q. You didn't do that instead you said to him it was genuine that's right? A. No that's not true. I offered to hold the vehicle for him so he could inspect it himself or have someone he knows and trusts inspect it. 13 In determining what were the terms of the agreement reached between Mr Tsoutsouras and Mr Wilson I intend to apply the test enunciated by the High Court in Toll v Alphapharm (2004) 219 CLR 164. It said: 'It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.' 14 I was very comfortably satisfied on the balance of probabilities that Mr Wilson had a far better and more accurate recollection of what was said between he and the purchaser Mr Tsoutsouras in the telephone conversations related to the sale of the Ford sedan. Mr Tsoutsouras gave his version of the conversation in direct speech (para 4 hereof). He denied in his affidavit of 9 May 2007 that Mr Wilson said any of the things Mr Wilson claimed he said in his statement. Mr Tsoutsouras said the only conversation he had with Mr Wilson was that as set out in paragraph 4 hereof. 15 Such evidence was clearly wrong. In cross examination Mr Tsoutsouras agreed with Mr Wilson in relation to each of the following propositions or statements. Each of the propositions or statements was directly contrary to Mr Tsoutsouras's testimony as set out in paragraph 4 hereof and confirmed in his affidavit of 9 May: 1. He agreed that he had phoned Mr Wilson more than twice on the one night to persuade him to sell the car to him (Tp7,L34). 2. He agreed that Mr Wilson had said to him "If it looks, sounds and goes like a Falcon GT that has been good enough for me to date, and that I had never done any in depth checks of a formal nature on the car." (Tp8,L15). 3. Mr Tsoutsouras agreed that Mr Wilson had said to him: "Do you recall me telling you that I was thinking that a serious GT enthusiast would surely inspect the vehicle first before any money changed hands" and he agreed that he had replied "By the time I came to inspect that car the car would probably get sold.". 4. He agreed that Mr Wilson put to him: "Do you recall from the phone call Stan, my offer to take a deposit from you to hold the car until you can inspect it personally" and that your answer to me was: "It's not worth your time", and that Mr Tsoutsouras replied: "It's not worth my time, I don't recall that". Mr Tsoutsouras only denied his alleged answer, he did not deny that Mr Wilson had put that proposition to him. I was satisfied that Mr Tsoutsouras had a poor recollection of the conversations and had to some extent reconstructed what had been said. 16 I was impressed with Mr Wilson's evidence. His evidence stood up well in cross examination and was not discredited. I prefer and accept Mr Wilson's versions of the conversations. 17 I am satisfied that Mr Wilson informed Mr Tsoutsouras that he had purchased the car as a Ford Falcon GT 1972 model, but that he had relied on the person from whom he purchased the car and that he had not made any checks himself as to the genuineness of the car. I am satisfied he told Mr Tsoutsouras that any serious GT enthusiast who was intending to purchase the car would have it inspected before any money changed hands and that Mr Tsoutsouras replied that by the time he came to inspect the car the car would probably get sold. I am satisfied that Mr Wilson proposed that Mr Tsoutsouras pay a deposit and that Mr Wilson would hold the car until he could inspect it personally, which offer was not accepted by Mr Tsoutsouras. I am satisfied Mr Wilson sold the vehicle in the same condition he purchased it. I am satisfied (the contrary was not suggested) that he did not do any modifications or alterations to the vehicle. EXPERT REPORT OF MR JOHN REED 18 The defendant did not dispute Mr Reed's evidence that the vehicle was not a genuine 1972 XA GT Falcon. Mr Reed's opinion was that the vehicle's chassis was that of a six cylinder Falcon and that the vehicle's original identification plate had been removed and replaced with an identification plate consistent with that of a genuine 1972 XA GT Falcon. THE PLAINTIFF'S SUBMISSIONS 19 Mr Young for the plaintiff submitted that the sale of the Falcon was a sale by description and therefore caught by s 18 of the Sale of Goods Act which is in the following form: 'S18 Sale by Description Where there is a contract for the sale of goods by description there is an implied condition that the goods shall correspond with the description and if the sale be by sample as well as by description, it is not sufficient that the bulk of the goods corresponds with the sample if the goods do not also correspond with the description.' 20 Mr Young indicated that the plaintiff also relied on a claim under s 40(p) of the Fair Trading Act 1987 which relevantly provides as follows: 1. In a contract for the supply … by a person in the course of a business of goods to a consumer by description there is an implied condition that the goods will correspond with the description … 2. A supply of goods is not prevented from being a supply by description for the purposes of this section by reason only that, being exposed for sale or hire they are selected by the consumer. 21 Mr Young submitted that if I was satisfied that there was a breach of s 40(p) of the Fair Trading Act, then the plaintiff would be entitled to bring a claim for damages under s 82 of the Fair Trading Act. 22 Mr Young relied on the following except from the Privy Council in Grant v Australian Knitting Mills Limited & Anor 54 CLR 50 to support the proposition that there is a sale by description in a sale of a specific item if the item is sold merely as a specific thing, but as a thing corresponding to a description. 'It may also be pointed out that there is a sale by description even though the buyer is buying something displayed before him on the counter : a thing is sold by description, though it is specific, so long as it is sold not merely as the specific thing but as a thing corresponding to a description, e.g., woollen under-garments, a hot water bottle, a secondhand reaping machine, to select a few obvious illustrations.' 23 Mr Young then submitted as follows: If I could bring that back to this case, Your Honour, if it is the case that what was being sold was a car, then that's not a description other than its of a car. If what is being sold is a Ford a genuine Ford GT and that is a sale by description. Your Honour that's the law. We need to show therefore that what was being sold was a Ford GT, not any old car at your own risk, come and have a look at it. 24 That submission highlighted the difficulty facing the plaintiff in this matter. The car was described as a Ford Falcon GT 1972 in the advertisement. 25 There was nothing in the evidence which indicated that the vehicle could not be properly described as a Ford Falcon GT 1972. Mr Reed's report of 17 March 2007 did not contradict that proposition. His statement established that the vehicle was not a genuine 1972 XA GT Falcon. There was no evidence that the vehicle could not properly be described as a Ford Falcon GT 1972. Indeed Mr Reed's second affidavit dated 16 May 2007 completely established the point I am making. In that affidavit Mr Reed attached copies of advertisements appearing on the Ford Muscle Car website, showing a range of sale prices for XA GT Falcons at between $48,000 to $80,000 depending on their condition and quality. Significantly he attached as Exh.B a copy of an Ebay advertisement dated 12 September 2006 showing an unauthentic XA GT Falcon which sold for $14,600. 26 The claim made by Mr Tsoutsouras was that the car he purchased was not a genuine 1972 XA GT Falcon. I was satisfied on the evidence that the vehicle was not advertised or sold as a genuine 1972 GT sedan. Applying the Toll v Alphapharm principle, I am satisfied that a reasonable person would understand by the language in which the parties expressed their agreement, that Mr Wilson did not warrant or represent that the vehicle was a genuine 1972 XA GT Falcon and did not sell it on that basis. A reasonable person would understand that the description of the vehicle as advertised and as described in the conversation, did not include that it was a genuine XA GT Falcon. 27 The plaintiff also claimed damages on the basis that the defendant had made untrue representations as to the genuineness of the vehicle and that in making such representations the defendant was negligent. The plaintiff's claim on this basis must fail, because I was not satisfied that he represented the vehicle as being genuine, and therefore any claim based on negligence must fail. 28 I am also not satisfied that the defendant was guilty of any misleading or deceptive conduct pursuant to s 42 of the Fair Trading Act. 29 There is one aspect of the matter which I should discuss further. I found that the advertisement did not describe or represent the vehicle as being a genuine 1972 Ford Falcon GT. I found that the defendant did not make that representation and such representation was not a term of the contract. The advertisement did not form the offer for the contract, but I was satisfied that the parties agreed to sell and buy the vehicle described in the advertisement. The advertisement did refer to a 351CI. Mr Reed said that referred to a 351 cubic inch 8 cylinder chassis. The chasis on Mr Wilson's Ford Falcon was a chassis of a 6 cylinder Falcon. That was one of the features which led Mr Reed to find that the vehicle was not a genuine 1972 XA GT Falcon. There was no evidence as to the difference in value of a Ford Falcon GT 1972 as sold with a 351 cubic inch chassis to one with a chassis of a 6 cylinder Falcon. There may be an argument that in relation to that one aspect, the vehicle did not conform with the description. However, the case was not run on that basis and in my view the plaintiff was not entitled to succeed on that basis. CONCLUSION 30 Mr Wilson advertised his Ford Falcon GT 1972 for sale for $32,000. He sold the vehicle to the plaintiff for $28,000. If it was a genuine 1972 XA GT Falcon the vehicle would have been worth more than $28,000. I am satisfied Mr Wilson did not represent the vehicle as being genuine. He had not carried out the appropriate tests and recommended that the purchaser should do so and should satisfy himself. The purchaser decided not to for fear that he might lose the vehicle. In my view the purchaser elected to take the risk. Some twelve months after the sale the purchaser discovered that the vehicle was not a genuine 1972 XA GT Falcon and in all the circumstances of this case, I am satisfied that it is the defendant who must bear the loss. 31 There will be judgment for the defendant. 32 The defendant was not legally represented on the hearing. He did apparently consult some solicitors in Victoria, but they did not file a Notice of Appearance. The case was somewhat unusual. Neither the plaintiff nor the defendant was dishonest. I believe that the dictates of justice would be satisfied by an order that the plaintiff is to pay the defendant's costs being travelling expenses and loss of wages, if any, for his attendance at the hearing of the matter. 33 I shall hear from the parties in relation to costs. B.A. LULHAM DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.