Alandreamy Pty Ltd v The Stewart Car Company (Banksia) Pty Ltd

[1987] FCA 238

TN THE FEDERAL COURT OF AUSTRALIA I

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NEW SOUTH WALES DISTRICT REGISTRY I No.G 78 of 1986

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GENERAL DIVISION I

:	-	B
ALANDREAMY PTY. L I M I T D

Applicant

m:

THE STEWART CAR COMPANY

(BANKSIA) PTY. L I M I T D

First Respondent

RNA	:
THE STEWART CAR COMPANY
PTY. LIMITED

CORAM: FOX J.

D=: 14 APRIL 1987

REASONS FOR ,JuDcMENT

FOX J.

The applicant sues in reliance upon s.53(b) of the Trade

Practices Act 1974. Its case is that on 21 October 1985 it

purchased a Mercedes Benz 190E motor car from

respondent. which is one of a group of companies,

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engaged in the sale of

At the time

everyone who had a look at it to be in new condition in all

respects without any blemishes so far as its finlsh was

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concerned. A few days later, however, Mr Mak. who took delibery

of the vehicle on behalf of the applicant and who has thereafter

used it, noticed after cleaninq it that there was a small section

on it whirh was slightly discoloured.

He took the car back to Stewarts and pointed thls out, and I think one or two other very sliuht blemishes were observed

at that time. The person inspectinq xt thouuht that it was a

mark probably due to bird droppings and suqgested that the matter

be brought to attention when the car was brouaht in for

servicina. This happened in November 1995. 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

mudquards been sprayed an acrylic paint. This was paint which.

If not precisely the same as the enamel on the rest of the

vehicle, accommodated itself to that colour in such a way that

nobody had theretofore noticed the difference. There was later

discovered a deTree of lack gf 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 nothinu to be done

except note the fact that there had been used this acrvlic palnt.

and the car was taken away by Mr Mak.

He has in fact been uslnu it for about 18 months.

Apparently it is not easy to detect the difference in the colour of the bonnet and mudguards from the rest of the colour of the

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car. althoush 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 thousht

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 Hercedes Benz import depot at Milperra. The fact -

is. on the evidence, that a vehicle is the subject of a close inspection at Hilperra because It not infrequently happens in the course of transit that a car will suffer some damage as a result nf which some work has to be done to put into saleable tondition.

The submission made by the applicant is that the defect

was one which rendered the car other than new within the meaninq

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 a l l relevant

considerations. One has indeed to start off wlth a contrast

between the vehicle as sold and how it oriulnated. 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 i n Germany, which

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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 rase that the applicant

ordered a new car and there was delivered to Mr Mak. actina on

its behalf, a car which appeared to be new in all relevant

respects. The defect. as I thlnk 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 on a 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 sliqht. A t some staae the defect will doubtless become

more apparent. The degree to which the car varled from what was

a normal enamelled car was at the tune of supply very slight.

There vas a body of correspondence passing 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 vehlcle to

Mr Mak or his company in the meantime.

There were also other offers and one o r more of them I

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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 50

the matter in question. I have made some passlna observations on

this question and I invited the parties to consider a settlement.

I will not add now to anvthing I then said.

It seems to me however that the defect in questlon

(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. I therefore

am of the opinion that the case based upon s.53(b) fails.

I should sav that a number of other matters were pleaded

but no reliance has been placed upon them and I have dealt wlth

the only issue which has been the subject of debate. I am

therefore of the opinion that the application should be dismissed

with costs.

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(Discussion ensued)

I will note that counsel for the applicant undertakes

that the undertakins alreadv given will be continued until

payment in full of the amount of costs ordered to be paid in the

proceedings.

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.

-+$ii2- Associate

Dated: 14 April 1957

Counsel for the Xpplicant:	J. Glissan ?.C.
,S J. Onisforou
Solicitors for the Applicant:	Mr V. Ilic
Counsel for the Respondent:	D.E. Grieve 9.C. & R.W.Hunt
Solicitors for the Respondent:	Kennedy Hannford & Associates
Dates of hearing:	13. 14 April 1987