Attorney-General (NT) v Maurice

[1986] FCA 91

T-rsd&-eractlces - n i s l e a c l i n a or deceptive conduct - appllcatlon

under 5.52 and accrued Jurlsdictlon - sale of motor vehlcle -

alleaed representations by salesman as to condition of vehicle -

I whether rnlsleadlnu or deceptive - aareement to purchase expressed

as subject to inspection on or before delivery - relevance of

representatlons made between date of aureement and delivery -

omission from statement of claim of particulars of certain

representations relied upon by applicant - whether applicant bound

by pleadings - relief appropriate

Trade Practices Act 1974 ss .52 . 53. 58 and 87

HOGARTH GALLERIES PTY. LIMITED v. CITY AUTOMOBILE HOLDINGS

PTY. LTD. formerly DAVIS COLOUR DISPLAYS PTY. LIMITED	t/a
NEW ROGiLFX MOTORS

No. G146 of 1985	i ,
!'
l 1 .
i
TOOHEY J.
._
..
PERTH	I
. .,
27 MARCH 1986

IN THE FEDERAL	COURT	I
OF AUSTRALIA	)

NEW SOUTH WALES	I	No. G146 of 1985
DISTRICT REGISTRY GENERAL DIVISION

B E T W E E N :

HOGARTH GALLERIES PTY. LIMITED

Applicant

and

CITY AUTOMOBILE HOLDINGS PTY. LTD.

formerly DAVIS COLOUR DISPLAYS

FTY.

LIMITED t/a NEW RONLEY MOTORS

Respondent

I.

MINUTE OF ORDER

JUDGE MAKING ORDER: TOOHEY J.

DATE OF ORDER:	27 March 1986
WHERE MADE:	Perth

THE COURT ORDERS THAT:

1.	"he contract made by the applicant with the respondent for	I.
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the purchase of Jaguar XJS Coupe registered number NJT 596 is

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void.

2. The respondent repay to the applicant the sum of $21,000 paid

by the applicant to the respondent	as purchase price of
the vehicle.

3 . The respondent pap to the applicant the sum of $2,100 as

interest on the sum of $21,000.

2.

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4 . The respondent pay the applicant’s costs of the appllcatlon.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

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IN THE FEDERAL COURT	I
OF AUSTRALIA	I
NEW SOUTH WALES DISTRICT REGISTRY	i No. G146 of 1985
)
GENERAL DIVISION	i
B E T W E E N :

l	HOGARTH GALLERIES PTY. LIMITED
I

Applicant

and

CITY AUTOMOBILE HOLDINGS PTY. LTD.

formerlv DAVIS COLOUR DISPLAYS	PTY.
LIMITED t/a NEW ROWLEY MOTORS

;	Respondent
I I

C m : TOOHEY J. I

I

I 27 March 1986

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REASONS FOR JUDGMENT

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These proceedings arise from the purchase by the

applicant in May 1985 of a secondhand Jaauar XJS coupe, then

registered no. NJT 596.

The applicant alleges a breach by the respondent of

ss.52, 53 and 58 of the Trade Practices Act 1974. It also alleges

breach of contract and negligence on the part of the respondent.

Pleadings were filed and at the instance of the parties

directions were ulven for the filinu of affidavits. It seems to

have been contemplated by the parties that there would be a trial

on affidavit evidence. As it must have been anticlpated that

there would be a conflict of evldence as to what was said at the

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time the motor vehlcle was bought. a trial on affldavlt evldence

was hardly approprlate. As it turned out, most of the deponents

of affidavits qave evidence either to ampllfy what appeared in

their affidavits or because they were required to attend for

cross-exammation. Questions of credibility are Involved and, for

l all practical purposes, the matter must be determined on oral

I .

evidence and exhrblts.

On the appllcant's ide. the principal witnesses

I relatlnu to the purchase of the Jaguar were Clive Andreas Evatt, a

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barrister and a director of the applicant, his wife Elizabeth

Maraaret Evatt, who IS also a director of the applicant, and Mr.

Evatt's son Victor Raphael Evatt who was at the time a schoolboy.

The applicant also called evidence of a technical nature relating

I

to the vehicle.

"he respondent called a number of witnesses. John

Frederick Howell was the manager of New Rowley Motors at Artarmon

where the vehicle was bought. John Thomas Watterson was the

respondent's sales representative at Artarmon. Both men spoke to

I Mr. Evatt, Mrs. matt and Victor Evatt in connection with the sale

of the Jaauar. The respondent called other witnesses to uive

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evldence of the condition of the Jauuar at the time of sale, of

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work done on it at the request of the applicant and	of	its	I .
...

7 .

condition thereafter.

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The story beuins on 11 May 1985 when Mr. Evatt and

I Victor visited New Rowley Motors' premises at Artarmon. New

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Rowley Motors are Jauuar dealers. Mr. Evatt went there because he

was Anterssted m buylna a secondhand Jaauar thouTh he had no

partlcu1d.r vehlcle In mlnd. M r . Evatt sard that he spoke to

someone, whom he ldentlfied as Mr. Watterson. who showed him a

ureen coloured Jaguar. It is	necessary to set out his account	of
the conversation In iull:

"I said to him, 'How old 1s this vehicle?' He said, 'It

is 1978.' I said, 'It is seven years old. What is its

condition like?' He said. 'It is in excellent

condition'. I said to him, 'Do you know anythinu about

the car?' He said, 'Yes. I know the owner. I have

known the owner since he uot the car and I know all

about the car. I know all about its history.' I said

to him, 'Has it been involved in any accident?' I

think I said. 'Has it been involved in any major

I

accident?' He said, 'No, it has not. This car is in

uood condition.' I think that is the only conversation

I had with Mr. Watterson. with the exception of siunlnq

an order form and payina a deposit. No, I beq your

pardon. I said to him, 'I want an NRMA inspection.' He

said to me. 'Yes. you can have an NRMA inspection, but unfortunately there is somethina like a two-week delay in arranuina these inspections because of the backlog

of intendinu purchasers wanting inspections and you

will not be able to aet an inspection for two weeks.'

I said, 'Well, if we buy the car and we do have an NRMA

inspection after we buy the car, will you carry out all

the repairs, if any, found necessary in the NRMA

inspection?' He said, 'Yes. any repairs required from

the NRMA inspection we will carry out straiqht away,

but they will only be of a minor nature because the

car. as I said, is in good condition."'

I

Victor Evatt spoke of a conversation with

Mr. Hatterson

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'	1
.	-.

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in which the latter described the Jaguar as In "excellent i c

condition, in good condition". He also recalled his father askina

for an NRMA inspectlon and Mr. Watterson replying that there was a

two week waiting period but that the car would be covered by a

three month or 5,000 kilometre warranty and "any repairs needed

would be fixed. seen to". Victor Evatt accompanied Mrs. Watt to

New Rowlep Motors on a later occasion and I shall deal with that

part of his evidence when I come to Mrs. Evatt's visit.

4.

Mr. Evatt also spoke to Mr. Howell. The advertised

price oi the vehlcle was $23.000. Mr. Evatt offered $ 2 0 , 0 0 0 and

was told that, if there was no trade-in, the respondent would

accept $21,000. MY. Evatt was uncertain whether the discusslon

over price was wlth Mr. Watterson or Mr. Howell.	I am satlsfied
that it was with the latter.

!

Mr. matt then signed a retail buyer’s order form,

expressed as a request to supply the applicant with the vehicle in

questlon for a prlce of $21,000, payable as to a deposit of $100

with order (which Mr. Evatt then paid) and the balance at or

before delivery. Mr. Watterson who completed details on the	form,
wrote below the reference to sale price:

I

“Three Months or 5,000 KM Warranty as from time of

Delivery 16/5/05”.

I	I,
I .

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Below that he wrote:

“Subject to Inspection on before Delivery”.

Mr. Howell’s evidence was that it was he who spoke first

to Mr. Evatt. althouqh he is the manauer of New Rowley Motors, Artarmon and Mr. Watterson is a sales representative. Mr. Howell

said that he spoke to Mr. matt because the sales representatives

were busy at he time. He then handed Mr. Evatt over

to Mr. Watterson and did not speak to Mr. Evatt thereafter, either

on that occasion or on any later occasion.

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5.

In cross-examlnatlon Mr. Howell said that he made no

representatlons about the vehlcle to	Mr. Evatt and	1 accept his	, .
' , L.

denial. Perhaps not surprlslnglp, there was some confuslon on the , .

part of wltnesses as to the preclse sequence of events. However	I	.	--.
. .

am satisfied that Mr. Evatt's initial contact was wlth Mr. Howell

but that it was only brief and that he was then handed

over to Mr. Watterson who spoke to him at ureater length and

completed the retail buyer's order form.

Mr. Watterson denied having said to Mr. Evatt or to

1

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I Victor Evatt that the car was faultless or was in excellent

j condition or that he knew the previous owner personally or that he

knew all about the vehicle or that it had not been involved in any

major accident. Indeed he denled having made any of those

statements to Mrs. Evatt as well. He agreed that he said that the

respondent would give a three month or 5,000 kilometre warranty as

from the time of delivery and that is why he wrote those words on

the order form. He also agreed having said that the applicant

could have an NFWA inspection and that the respondent would carry

out any work or repairs recommended by that inspection.

Mr. Watterson said that by sayina the vehicle was subject to

inspection. he meant that if, after the NRMA inspection, it was

not approved by the applicant, the respondent would return the

$100 deposit. He also invited Mr. Evatt to drive the vehicle and

that invitation was accepted.

In cross-exammation Mr. Watterson confirmed his denials

that he had made statements concerning the condition	or history of
the Jaauar other than:

. . .

"B11 I dld sap was that the car was in aood condltion ..

for the aae of the car".	:
'1 ,
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I make these findinus concernmu the visit to the

respondent's premises on 11 May 1985:

I "

1. Mr. Watterson told Mr. Evatt that the Japuar was in good

, ..

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condition, that it was in excellent condition.

2 . I am not satisfied that Mr. Watterson qualified this li.

representation with words such as "for the aae	of the car".	i
6 .

Nevertheless, in assessina the implications of the I-

representation, the aae of the Jaauar must be taken into

account. It was a 1977 model.

i	' , . I
:

3 . Mr. Watterson aureed that the applicant could have an NRMA

inspectlon and that the respondent would carry out any work

found by the NRMA to be necessary.

4. I am not satisfied that Mr. Watterson told Mr. Evatt that he

!

knew the previous owner of the Jaguar personally though it is

probable that Mr. Watterson said somethinu about the history

of the car.

5 . I am satisfied that Mr. Watterson told Mr. Evatt that the

Jaguar had not been involved in any major accident. I

interpolate to sag that there was no evldence that the Jaquar

had ever been involved in a major accident. There was

- 1 .

evldence of palnt work on the external panels. suaqestinu

some panelbeatin?.

Havinq reuard to the words on the order form "Subject to

lnspectlon on before delivery".	I conclude that on	11 May 1985 the	. .
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applicant aureed to buy the Jaquar for $21,000, subject to a

conditlon precedent that the applicant niuht refuse delivery and

obtain a refund of deposlt If dissatisfied with the vehicle's

condition.

t . , :

Mrs. Evatt visited the respondent's premises on three

occasions. The first occasion was some two days after her

husband's visit of 11 May, which was on a weekend. She spoke to someone whom she thouuht was Mr. Watterson and she was taken by him to the workshop where there was work being done on the car.

At this staae there had been no NRMA report on the vehicle. The . .

car was beinq "detailed" i.e. being cleaned up and checked in

accordance with the respondent's usual practice. It would seem

that when Mr. Evatt saw the Jaguar on 11 May, it had just arrived

and had not been cleaned or otherwise made ready for sale.

Victor Evatt was with hls stepmother on her flrst visit.

He said that he polnted out a few rust spots and Mr. Watterson

sald they would be attended too.

r.

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Mrs. Evatt and Victor returned to the respondent's

premlses the next day and on that occasion Mrs. Watt took the

vehicle for a test drive. Victor Evatt said that on this occasion

8.

he noticed that the rust spots had. been attended t o but there were

still d few other thinae to be done.

On 17 May Mrs. Evatt aaain went to the respondent's

premises, this time alone. She paid the balance of purchase price

viz. $20 ,900 and took delivery of the Jaguar.

In the first of several affidavits sworn by her in these

proceedings, Mrs. Evatt deposed as follows:

"4. Prior to the said delivery and purchase I had a

number of conversations with Mr. Watterson wherein

Mr. Watterson said words to the followinu effect

'The car is in excellent condition. I know the

previous owner personally and I know all about the

car. It has not been involved in any major

accidents and is in really qood condition. We will

give you 3 months or 5,000 km warranty as from the

I	time of delivery. You can have an NRMA inspection
and we will carry out any work or epairs following
this inspection. Unfortunately you cannot have an
NRMA inspection before purchase because there is a
two week wait for an NRMA inspector's appointment. .
The sale of the car is definitely subject to your
inspection and approval. In my opinion the car is
faultless'. 'I

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The affidavit does not identify with any particularity	I .
1

when	those	conversations	took	place.	But	it	would	seem,	,-
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from Mrs. Ehatt's answers in cross-examination, that any

significant conversation concerning the motor vehicle took place i

on the occasion she took it for a test drive. Mrs. matt was

adamant that she was told bp a man, whom she identified

as Mr. Watterson, that in his opinion the Jaguar was "a very good

vehicle". She said that she noticed a dent in the bonnet and that

.,

the man said to her "Well. it is. you know, an aaed - 7 or 8 years ' 7'

old - and you cannot expect everything". to which she replied "Of

I '

I S

course not". She was adamant that M r . Watterson had s u d that thc

car was in good conditlon. that he knew the car. that he knew the ,-

owner and that in	hls opinion it was in uood condition. She
added:

"I am absolutely certain he said that and I was very

pleased and happy to hear that. He said that the owner

had only sold the car because he was goin? to purchase

a new Jaguar he was o pleased with Jaguars. so I was

really happy to hear that from him".

Mrs. Evatt was a credible witness and I accept her

account of the conversatlon with an employee of the respondent who

was, in all likelihood, Mr. Watterson. The latter denied he sald

he knew the previous owner. I accept that he did not know the

owner but I am satisfied he said something that was reasonably

understood by Mrs. Evatt to mean that he did know the owner.

As mentioned earlier, Mrs. Watt took delivery of the

vehicle on 17 Map. Some minor work had been carried out on the

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Jaguar but the warranty remained in force and the respondent did

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I	not suggest otherwise. In my opinion, the proper construction to
I
place on the takina of delivery is this. The condition precedent
was at an end; the warranty on the order form was operative and in
I
additlon there was a collateral warranty in the form of the
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undertaking aiven by Mr. Watterson that the respondent would
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attend to any work required by the NRMA.

Before she took delivery of the Jaquar, Mrs. Evatt had

, :.

rung the NRMA and was told that she would have to wait at least l

two weeks for an inspection. The inspection was carried

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i 10.

out U I I 28 MaTr 1905 by Murray Jok? L o w e . an inspecting Pnaineer

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with the NRMA. Mr. Lowe t o o k dellvery of the Jaauar from the

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Evatts' home and took it back. Mrs. Evatt was not there when he

returned but he left his report.

It will be necessary to refer to Mr. Lowe's report in some detail later in these reasons. For present purposes It is

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enough to set out the summary with which the report begins:

I

"A satisfactory vehicle displaying some Tenera1 wear and

deterioratlon to various areas, as miaht be expected

I

with age and mileage, and requires attention to the

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below listed items. and extensive body rust, to return

it to a serviceable, roadworthy, condition".

The day following receipt of the report, Mrs. Evatt

telephoned Mr. Lowe and spoke to him. She then rang the

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respondent and spoke to Mr. Howell. telling him that the NRMA

'I	report stated that there were	a number of things to be done	to the
1

I car. Mr. Howell told her to bring the vehicle in. On

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I	31 May Mrs. Evatt set out to drive the Jaquar to the respondent's	:
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premises. She had difficulty in starting it but, in her words,

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"It did eventually go". However the vehicle seemed to lose power

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and at traffic lights it stopped and Mrs. Evatt got help to roll I '

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it into the kerb. She then rang the respondent and a tow-truck

was sent to take the Jauuar to the respondent's premises.

.	,
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In the week beginning 3 June 1985 Mrs. Evatt spoke by

telephone to officers of the respondent on several occasions. I 6 ,- ..

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accept that on one or more of those occasions she spoke

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to Mr. Howell though it is likely that on other occasions she

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11.

spoke to someonc elsc in the respondent's oifice. She t o l d Mr.

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I	Howell that the inspector had said that the car was unroadworthy and structurally unsafe. Mr. Howell responded that he did not
i	I
agree with the NRMA report. On one of these occasions Mrs. Evatt
spoke to Mr. Gannon, the respondent's service manager. She said

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that Mr. Gannon commented "I know that Mr. Howell is very worrled

about the rust but don't quote me on this". Mr. Gannon aureed

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that he spoke by telephone with a woman who identified herself as

l	Mrs. matt.	She asked him "Have you seen the rust in my Jaguar
!

car?", to which he replied "No. but I have been told about it",

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I	Mr. Gannon denied having said that Mr. Howell was worried about
i	the rust but I accept Mrs. matt's evidence on this point.
I
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The last conversation Mrs. matt had with anyone in the

respondent's employ was on 6 June 1985. That conversation was

with Mr. Howell who told her that he would ring her back after he

I

had spoken to Mr. Gannon. The Jaguar was still in the possession

i of the respondent as indeed it is at the present time.

Thereafter events moved with surprising speed. The

following day, 7 June, Mrs. Evatt swore an affidavit in support of

the present application. It is of some interest that although

Hogarth Galleries Pty. Ltd. is shown as the applicant in the title

to the affidavit, no name appears against the respondent.

I	Presumably there had been no time to ascertain the correct name of
i
I	the seller. The retail buyer's order form appears to be a
!	standard document with no identification of the seller. The
application itself is dated l1 June though it was not filed until

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l	12.
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14 June. In an affidavit sworn 2 7 June 1985. Mrs. Evatt deposed

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I as follows:

" 2 . On or about 8 June 1985 the solicitors for the ..

Respondent elephoned the solicitors for the

Applicant and said words to the effect that the

l	Respondent would carry
the motor vehicle and would then submit the car to

out all necessary repairs to

a further NRMA inspectlon. I'

I

i It was not made clear how the respondent's solicitors knew as

early as 8 June that the applicant had consulted solicitors.

I

The respondent arranged for a further inspection by the

i NRMA and that inspection was carried out on 25 June by Mr. Lowe

who had made the earlier inspection. His report, to which further

reference will be made later, shows that a number of the items

previously listed for repair had been attended to but that some

still required attention. Of course by that time proceedings had ,.: -.

been instituted though no defence was filed until	19 September.	.	I
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As it happened, on the day on which the defence was filed another

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NRMA inspector Mark Phillip Salkeld carried out an inspection f

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the Jaguar. This was done at the respondent's request. His

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report will be referred to later in these reasons.

I I To bring the story up-to-date, registration of the

i Jaguar expired and Mr. Golding, !oint managinq director of City

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Automobile Holdings Pty. Ltd. returned the plates to the

Department of Motor Transport. He said that he did this

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deliberately so that it would be necessary for the vehicle to pass

the scrutlny of the department before it could be re-registered.

*

13.

Gn 25 November 1305 the Jaauar was lnspectcd by the dcpartrnent and	,.
new plates Issued. The vehicle is currently reuistered NSU 939.

I turn now to the condition of the Jaguar at the time of

sale and subsequently. As to its condition at the time of sale, I

accept the evldence of Mr. Lowe. It is true that he does not have

formal qualifications for certifying the roadworthiness of

vehicles.	But	he was so qualified	in	New	Zealand	and	his	I.
!

qualifications in this country as a mechanic and his experience

with the NRMA enabled him to speak with authority on the matters

in his reports.

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Reference has already been made to the summary appearing

.,

at the outset in Mr. Lowe's report of 28 May 1985. In oral I .'

evidence Mr. Lowe descrlbed "satisfactory vehicle" as meaning "not

beyond repair". He said "It is reasonable at this stage, however,

as the summary would carry on, it describes further how the

vehicle is". In Mr. Lowe's opinion the most serious aspect of the

vehicle was rust in its main structural members.	He described
this in the following terms:

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"There was extensive rust, and by that I mean rust holes

in the front floorpan areas, around the jacking points

and also in the front hinge pillars, which are a

structural component, at the sill panel joints. They

were the main areas of the rust". ..

Mr. Lowe considered that the rust made the vehicle structurally unsound, meanlna It was unfit for re-registration and for use on

the roads. Other matters he observed of a serious nature were

"general oil leaks from the engine. transmission and the final

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14.

drive a5sembly and power steering". Loss of fluid in the steerinq

system would make the vehicle a hazard on the road. As to oil

leaks In the engine. transmission and final drlve assembly, Mr.

Lowe said that the vehicle was "actually dropping oil on the

roadway". This was not so much a hazard as abar to

re-realstration. Mr. Lowe thought hat next in order of

serlousness were the front suspension mountings and suspension bushes which had deteriorated and the mountinus had actually

separated at the rear of the front cross-member. Sufficient

deterioration could constitute the vehicle a hazard. Fluid was

leaking from the brake master cylinder which could lead to partial

failure of the braking system. The front suspension upper inner

control bushes had deteriorated. These are rubber insulators

which perish with due and when they do perish they cause excessive

movement which can in turn lead to damage to the mounting pins and

associated parts of the vehicle.

In cross-examination Mr. Lowe repeated that by

"satisfactory" he meant no more than that the vehicle was

serviceable. Mr. Lowe agreed that, to a deqree, most of the

!

matters referred to by him in hls report were the subject of

general wear and tear. But I understood him to put the matter of

I '

rust in a different cateuory.

Dealing with his inspection of the vehicle on 25 June

1985, Mr. Lowe noted that a number of repairs had been carried

out. For instance the front and rear mountings on the front

suspension cross-member had been renewed as had certain control

arm bushes. However there was still leakage of fluid from the

0

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I	power steeraqe	svstcm and no	work appeared to have	h w n done on
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this. Nor had the oil leakage been rectified. Some rust repair

work had been carried out around the front ?acking points but. in

!	Mr.	Lowe's opinlon, work needed to be done to the other rust
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affected areas.

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I	Mr. Salkeld carried out his inspection on 2 July 1985,
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I	that	is	just	over	a week	after	Mr.	Lowe's	re-inspection.	I !
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Mr. Salkeld had been	an	inspector with the	NRMA for some ten	,,
L

years. He also had formal qualifications and experience as a	.I
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motor mechanic.

There are some difficulties in makinq a direct

I	comparison between	Mr.	Lowe's reports and Mr. Salkeld's report.
I

Mr. Lowe used the form of "Used Car Inspection Report" and

i

"Re-inspection Report". Mr. Salkeld used the "Owner's Report on

I the Mechanical Condition of a Motor Vehicle" which has some

I	differences and seems more designed for an assessment of what
I
needs to be done under a contractual or statutory warranty. The
I
I
I	form of Mr. Salkeld's report contains provision for identifying
I
essential repairs and also a sheet headed "Explanations". This
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i	sheet identifies the motor vehicle bp reference to various
components such as under car and body structure, front and rear
suspension and steering, wheels and brakes, engine and cooling system. electrical system and transmission. A tick against any of these items reflects the inspector's assessment, not that the item
is perfect, but that "it was considered acceptable". A cross
indicates that some r pair required. s - Mr. Salkeld
I	listed 21 items as reauirina attention. Some of these e.g.
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"rCCtify operation of ciqar liuhter" were obvious . :lv mlnor. Some. while not major ltems, clearly called for attentlon. Freeinu up

the left wlndow winder, rectifyinu the operation of the horn and

renewina a tarnlshed headlight reflector, I take to be in this

.:

cateuory. Other items were more serious.	I include in these the	I.
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following:

6 Eliminate oil leakage at final drive inspection cover

7 Renew tailshaft rear universal joint (worn)

8 Eliminate fluid leakage at rear of transmission

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9	Eliminate oil leakacre at engine sump and oil cooler	, .	' .
hoses	I
...
11	Treat advanced corrosion at underside of right door

and at lower area of both door apertures at weather I :

seal recess and at lower front corner of right

front door aperture

12 Fit serviceable tyres to rear wheels (worn to lecral

limit at inner edges) t .

...	1.
..

15 Eliminate abnormal free-play at left upper control arm inner bushes

...
17	Treat corrosion at underside front of riuht front
floorpan at area of recent repair

18 Check and adjust front wheel alignment (uneven tyre

wear 1

...

20 Eliminate cause of excessive engine timing chain

operational noise.

0

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In cross-exarnlnation Mr. Salkcld waz taken to Mr. Lowe's

reports. Referred to Mr. Lowe's description of the Jaquar as not

being in a roadworthy conditlon. he commented:

"Well. on some of those items, yes, you would have to

say that, simply because there are certain items there

that would prohibit the vehicle passinq registration

check at that time".

This was a reference to Mr. Lowe's first report. As to the second

report, Mr. Salkeld said:

"Aualn there are some Items on there that again could cause the vehicle to be rejected on a detailed inspection for registration". . r.

Mr. Salkeld was not surprised to find, in a car of the

Jaguar's age, the items he considered required repair. He said 5 .

that oil leakage was a particular problem with Jaguars, at least

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on earlier models such as this one.	' .
i '

In the light of Mr. Lowe's and Mr. Salkeld's reports, it

I ,' ..

would have been misleading to describe the Jaguar on 11 May,

indeed at any tlme during May 1985, as in excellent condition,

even having reaard to its age. The particular defects observed bp

Mr. Lowe and Mr. Salkeld may not have been all that unusual but

_ .

they give the lie to a description of the vehicle as in excellent

condltion. Rust,	011 leakaqe and fluid leakaae were the major	r
. .

problems and they still existed (although some work had been done

on the rusted areas) when Mr. Salkeld carried out his inspection

I .

on 2 July. Indeed, at the time of sale the Jaguar was in an

18.

unroadworthp conditlon In the sense that it would not have met the

i

Department of Motor Transport's standards for re-registration.

I There was evldence from Mr. Gannon of work done on the

Jaguar. Some of this work was done in the service department of New Rowley Motors at Artarmon and is the subject of an invoice

dated 31 May 1985. The	work	was	described	in	this	way
by Mr. Gannon:

"There are ignition components, suspension components, a

globe, brake pads. mountinu brackets, a throttle cable;

so that type of work was performed: front suspension

work, iunition system in the enalne. The front brake P .

pads were replaced apparently - yes". ..

Mr. Gannon said that he arranged for rust rectification

to be carried out by Lee Smash Repairs. Mr. Gannon did not

inspect the vehicle after its return from that repairer. Mr. Salkeld's report indicates that work was done on the rust areas though rust was not entirely eliminated. After the Jaguar came

I

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I	back from Lee Smash Repairs, more work was done on it as	a result
I

of Mr. Salkeld's report. The work is the subject of an internal

invoice dated	30 July 1985 and was described by	Mr. Gannon in this
way :

"The parts booked out on the back here refer to

camshaft cover seal aaskets, so the first work - the

major work that was done was to oil leaks on the

camcovers of the vehicle and to the oil pump housing

of the vehicle and the kickdown swltch was fitted."

I

I In fact the work was more extensive than described by Mr. Gannon

and continued until 23 August.

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19.

There was evidence, both affidavit and oral. from

Messrs. Bostelmann, Lister and Golding who are respectively the

general service manauer of City Automobile Holdings Pty. Limited,

joint managing director of New Rowley Motors and joint managing

director of City Automobile Holdings Pty. Limited.

Mr. Bostelmann is a qualified motor mechanic with long

experience and is a certified motor vehicle examiner, able to

certify new and used cars for registration by the Department of

Motor Transport. On 30 January 1986 Mr. Bostelmann arranged for

the Jaguar to be placed on a hoist where it was

inspected by Mr. Lister and by him. Mr. Bostelmann had with him

the three NRMA reports and he said he paid particular attention to

the re-inspection report of 25 June 1985. Mr. Bostelmann said

that he checked all matters set out in that report, closely

inspecting the engine bay, the outside of the transmission casing

and front-end suspension. He said there was no serious leaking of

fluid from any of the major components of the vehicle and such

minor faults as were apparent were entirely consistent with its

age and mileage. It is desirable to set out verbatim some

paragraphs from Mr. Bostelmann’s affidavit sworn 11 February 1986:

“11 I also inspected and checked the panels on the

Motor Vehicle in particular the beaver panels and skirting the jacking points and the interior floor

plan. All panels were solid and there was only

minor rust on the inside of the interior floor.

This rust is surface rust and has no effect

whatever on the structure of the vehicle and Jaguar

vehicles after a	few years almost always have this
condition.

12 I drove the Motor Vehicle and tested it. It drove

perfectly straight, was solid on the road and

2G.

performed faultlessly under both pedal and hand

brakes.

...

14 I have absolutely no doubt his Jaauar is

structurally sound and perfectly roadworthy. It

complied with all of the requlrements of the

Department of Motor Transport for registration and

I would have no hesitation In certifyina the

vehicle for registration.

15 Having regard to its age I consider the vehicle to be In a sound and roadworthy condition."

I

I Lister Mr. gave evidence corroborating Mr. of hat

Bostelmann. He spoke of his long experience with Jaguars and

, '

other luxury motor vehicles.	In an affidavit filed in these
proceedmus Mr. Lister deposed:

"16

In my opinion the Jaauar is perfectly sound. I am

of the view that the Retail Askinq Price of the

vehicle is 23,000 dollars or 24,000 dollars and

it should not be sold for less than 21,000 dollars

at Retail and I would be quite happy to have it in

Stock.

17 At no stage did Mr. Evatt contact me about this :

vehicle. It is the firm policy of the Directors of L .

this Company who are myself, Mr. F.R. Golding and

l

Sydney Barrister and businessman Mr. Andrew Davis

to attend to and rectify any customers' complaints.

We have at all times been ready to do so for Mr.

Evatt but have never been given that opportunity by

him. If he had approached the Directors of the

Company we would have certainly fixed his

complaints and lent him a vehicle whilst the t

repairs were being done. No such opportunity was

given to us and these proceedings were commenced

without any prior notice."

Reference has already been made to Mr. Golding's

evidence relatinu to re-registration of the vehicle. He repeated

r

Mr. Lister's assurance that had Mr. or Mrs. Evatt contacted him.

the respondent would have fixed any complaints and lent them a car

while repalrs were belnu cclrricd out. In an affidavit

i

sworn 11 February 1986, Mr. Goldina deposed:

"8 ... I have carefully examlned the Jaquar NSU 939

tformally NJT 596) and have formed an oplnlon of

Its value. It is a good sound vehicle and if	it
were offered for sale at Rowley Motors we would

offer it for sale at $23,000 and would be prepared

I

I	to accept a cash offer of $21,000".
I I I I
There was no substantial challenge to the evidence of

1 Messrs. Bostelmann, Lister and Golding. I must therefore conclude

that the Jaguar is now in good condition for its age and

roadworthy and that it has passed the requirements of the

Department of Motor Transport for re-registration. Of course the

issue is

not condition at the time it was sold and what was then said about it. That is not to say that the present condition of the vehicle is the present condition of the vehicle but its

I .>

I	irrelevant for it may throw some light upon its condition in May	r .	.
I
1985. But is is apparent that a great deal of work was done on the Jauuar after that time.
I	..
1 :
I	._
I	I ,'

i The statement of claim pleads that between 11 and 17 May

I	1985	the	respondent	made	representations	to	the	applicant
I

I concerning the Jaguar. Curiously, the only representations

i	particularised are those said to have been made to Mrs. Evatt
i	though they are in terms similar to those made to Mr. Evatt and his son. Counsel for the respondent submitted that the contract for the sale of the Jaguar was made on 11 May 1985, that nothing said by the respondent thereafter could give rise to a cause of
action and that, the applicant pleading only what was
said to Mrs. Evatt. the application must fail in any event.
i	I

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l

I	f	D
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I	submlsslon.	accept	this	not	I do	Counsel for the
I

applicant aruued that because the affidavits filed included what

: ,:

was said on 11 Map 1985 and no partlculars had been sought by the

I

respondent, the Court should have regard to anything said by the

I I. .

I respondent concerning the condition of the vehicle to Mr. Evatt,

and to Mrs. Evatt. I do not find it necessary to determine this

i.

issue. The function of pleadings is to define the issues between

the parties. If a party is dissatisfied with the other party's

pleading, he may seek particulars or in an appropriate case apply

I I to have the pleading struck out. So far as the pleadings are

concerned, the respondent was entitled to assume that the

representations relled upon were those pleaded with some

particularity as having been made to Mrs. Evatt. On the other

hand, affidavits were sworn by Mr. Evatt and Victor and it was

clearly the intention of the applicant to rely upon those

I:

affidavits and the oral evidence of those witnesses. No objection ! '

was taken to the affidavits or the ora l evidence of those

witnesses on the ground of irrelevancy and the respondent was

content to meet the applicant on the ground the latter had chosen.

In those circumstances I would be minded, even at this stage and

subject to questions of costs, to permit the applicant to amend its statement of claim to plead representatlons made to Mr. Evatt on 11 May 1985.

But I do not think this is necessary. The agreement

made on 11 May was subject to a condition precedent which

operated until 17 May when Mrs. Evatt took delivery of the

vehlcle. Before she took delivery, she was told by Mr. Watterson

2 3 .

thal; the Jaguar was In excellent condition. For reasons mentloned

.. _ .

earller. thls constltuted mlsleadlna conduct on the part of the

respondent. The Jaauar was not I n excellent conditlon.

In my view, It is no answer to a claim made under 5.52

I -

of the Trade Practlces Act to point to a warranty aiven by the

t-.

seller and for the seller to express hls willingness to abide by

the terms of the warranty. If a buyer has a cause of action under

5.52 or under any other relevant section of the Act, he is

entitled to pursue his remedies under the Act. One of those

remedies is, by reason of 5.87, an order declaring the contract to

be void and directing a refund of money. In my view that is the

appropriate relief to be granted in the present case, having

regard to the nature and extent of items requiring attention. The

application as filed sought in the alternative an order that the

respondent carry out repairs to the vehicle to make it roadworthy

and in uood condition. When the hearing began that claim was

1

abandoned. I . L

The respondent has had the applicant's $21,000 since May

1985 and, uood cause not having been shown to the contrary, the

I '.

respondent should pay interest on that sum. Federal Court of

Australia Act 1976 s.51A. No evidence or argument was offered to

the Court as to an appropriate rate of interest; in the

circumstances I fix 12%. See by way of illustration Jones v.

South British Insurance Co. Ltd. (1984) 53 A.L.R. 408. I quantify

interest at $2,100.

24.

The applicant made a rlaim for what was described as

demurrage. being the cost of taxi fares throuqh lnability to make

use of the vehicle and also rent for parkinu facilitles. In my

view none of the amount claimed is recoverable. I am not

persuaded that any loss was sustained by the applicant s opposed

to loss incurred by Mr. Evatt in engauinu taxis which were for the

most part required in connection with his practice as abarrister.

As to the parking facilities. he needed to maintain these in any event: to lose them would mean that It would be very difficult for him to obtain parkinu space in the future.

Counsel for the respondent submitted that if the

applicant should succeed, it should pay the respondent's costs,

alternatively that each party should pay its own costs. The basis

I

I	of this submission	was that the applicant had moved too quickly
I

I and had brought proceedings at a time when the respondent was

i	expressing a continuing willingness to carry out the work thought
necessary by the NRMA.
I

i	I have some sympathy with this submission but	I do not
l	I

think It should prevail. The applicant had a cause of action

I

!	under the Trade Practices Act which it was entitled to pursue and
I I
as part of that claim to ask for the return of the purchase price
i
I
!	it had paid. At no time did the respondent offer to take back the
vehlcle though one would think, in the light of what was said by
Mr. Lister and Mr. Goldinq, that the respondent would have
suffered no real loss had it done so. Furthermore, the
respondent's defence denied making the alleged representatlons,
I	pleading in the alternatlve that If they were made they were true.

2 5 .

i

Thus the l m e s were drawn betmen the Parties at an early stage.

Cf. Walter v. Steinkopcf (1892) 3 Ch. 489.

i

The hearmg of the c l a m began In Sydney on 17 October

1985. As It happened, I was in Sydney at the time and aareed to

take the case on

the representatives that it would not last more than a day. That assurance by the parties' legal

I

I	optimism was ill-founded as appeared very quickly, given the areas
I
l	of factual dispute between the parties. It was not possible to
find a further hearing date suitable to counsel until 17 February
1986. When the hearinq began. the respondent's affidavits were
confined to those of Messrs. Watterson, Howell and Salkeld. It
was not untll the end of January 1986 that the Jaguar was
inspected by Messrs. Bostelmann and Lister and the affidavits of those gentlemen as well as the affidavit of Mr. Goldinq were not
sworn until 11 February. It was only just before the resumed
hearing In February that the applicant's solicitors were provided
with the additional affidavits. Whether earlier notification to
the applicant's solicitors would have helped to resolve this
matter without a further hearlng is something on which I should
not speculate. But it may have served some useful purpose for the

.. _ I

applicant to have been told of the re-registration of the vehicle

in November 1985.	In all the circumstances, costs should follow
the event.

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I certify that this and the preceding

twenty-four pages are a true copy of	...
the reasons for judgment herein of his	1.
Honour Mr. Justice Toohey.
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