Baffi v Mack Trucks Australia Pty Ltd

[1983] FCA 321

IN	THE	FEDERAL	COURT	OF AUSTXALIA	)
1

V I C T O R I A	D I S T R I C T	R E G I S T R Y	)	No. 89 of 1982
)

D I V I S I O N	G E N E R A L	)
BETWEEN:

B A F F I C ANOTHER Applicant

and

MACK T R U C K S A U S T R A L I A P T Y . L T D . R e s p o n d e n t

ORDER

JUDGE MAKING ORDER : W o o d w a r d J .

DATE ORDER OF : 4 N o v e m b e r 1983

WHERE MADE : Melbourne

THE COURT ORDERS THAT:

The application be dismissed w i t h costs.

IN THE FEDERAL COURT

OF AUSTRALIA )

)

VICTORIA	DISTRICT	REGISTRY	j	No. 89 of 1982
1

DIVISION	GENERAL	1
BETWEEN:

BAFFI & ANOTHER Appllcant

and

MACK TRUCKS AUSTRALIA PTY. LTD. Respondent

CORAM:	Woodward J.
-	DATE:	4 November 1983

REASONS FOR JUDGMENT

This is an unfortunate case In which the first-named

applicant (whom I shall refer to for convenlence as 'the

applicant') ventured into the interstate haulage business wlth no

capital and only limited experience. In the result he has lost a

great deal of money. I am satlsfied from all the evldence before me that the business which he contemplated - regular trlps between Perth and Melbourne or Sydney - could only have been moderately

profltable if all his hopes had been realized. It was necessary

that his semi-trailer should be on the road for almost the whole

year, and should average three return trlps a month, in order for

him to show a reasonable profit. The evidence strongly suggests

a

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that even these assumptions were quite unrealistic. If his truck

was off the road for any length of time, it was clear that	he
would be in great difficulties.

In the event his truck was off the road quite frequently

in the nine months he operated it and it required some quite

expensive repairs in that time. On a few occasions the length of

time off the road was increased substantially by the applicant's

inability to pay for repairs. Eventually the point was reached

where he was months behind with his hire purchase payments, found

himself unable to pay for a major repair and had to allow the

truck to be repossessed at a further substantial loss. He already

owed large sums of money to various members of his family who had

assisted him in his venture.

For most of his misfortunes the applicant blames the

respondent, the company which sold him his prime mover. It is

common ground that the vehicle was secondhand and was several

years old at the time of the purchase. I find that the applicant

had told the manager of the respondent's Victorian Used Trucks

Division, Mr. Fraser, that he wanted a prime mover like one

belonging to a friend, Mr. Latorre, who had bought his vehicle

from the respondent. Mr. Fraser found that there was a vehicle

answering this general description in the respondent's sales yard in Sydney. He obtained photographs and a written appraisal of it,

showed these to the applj cant, and suggested that he and M r .

Latorre look at the vehicle when next in Sydney. After doing so,

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the appllcant said. he was interested in buying it and it was

brought to Melbourne. After looking at it again with Mr. Latorre,

who had more experience with interstate haulage than himself, the

applicant made a firm decision to buy it. After some further

discussions with Mr. Fraser and another sales representative, the applicant signed a document and after arranging finance through a

hire purchase company, which lnvolved the mortgaging of	his
parents'*home, he took delivery of the vehicle.

The document which the applicant signed was a 'Used

Truck Purchase Order' which began with the words

"I hereby order from you subject to all terms,

conditions and agreements contained hereon, and on an "as is" basis without warranty of any character expressed or implied, including any warranty of

merchantability or fitness for a particular

purpose, the following. "

The following provisions also appeared on this short

document, a copy of which was handed to the applicant

"Alterations, repairs and additions included in

sales price: - Vehicle to be in saleable condition

- fit twin headlights."

"NOTICE TO THE BUYER"

"(l) Do not sign this agreement before you read it.

( 2 ) You are entitled to a completed copy of this

agreement.

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(3) If you' default in the performance of your

obligations under this agreement, the vehicle may be repossessed and you may be subject to suit and liabillty for the unpaid indebtedness, under the terms of the security

agreement pertaining to this transaction. I'

"I agree that this order, which I have read and to

which I agree, constitutes the entire agreement

relating to the sale of said property ...I'

.On the facts as I find them, the respondent does not

need to rely on this very explicit document to avoid the

consequences of any oral representation.

The applicant alleged in his statement of claim that he

was misled by the representatives of the respondent in several

different ways. In the first place he claimed that the vehlcle

was represented to him as being a 1977 model. However in evidence

he has not maintained that claim and says only that the document

he signed described the vehlcle as belng' a 1976 model, whereas the

manufacturers plate on the truck shows it to have been built in

June 1975. This is disputed by Mr. Fraser, who gave evidence that

the relevant plate showed it to be a 1976 vehicle, although some

components may have carried a 1975 plate. His evidence was fully

confirmed by the respondent's accountant.

Even if I had found on this point that a

misrepresentatlon having legal consequences had been made,	It
would not have been a serious misrepresentatlon, because the

difference between June 1975 and an unspecifled date in 1976 could

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not mean very much by the middle of 1980. It could not have been

an inducing factor persuading the applicant to buy the vehicle. I

am satisfied that the reality of the matter was that the applicant

purchased the truck which he saw in front	of him and which he had
inspected both in Sydney and Melbourne.	He certainly never made

any complaint to the respondent about the year	of manufacture of
the vehicle.

- The next point relied upon by the applicant was that the

respondent‘s officers told him that t.he truck had a

“reconditioned“ motor. However, I accept the evidence of Mr.

Fraser that, reading from an appraisal. sheet before him, which was

shown to the applicant, he told the applicant that the truck‘s

engine had been “overhauled“ s1x months earlier. There is nothing

to suggest that this statement was inaccurate. The applicant was also given the name a.nd telephone number of the workshop which had

conducted the overhaul so that he could make further enquiries if

he wished to do so. Although the applicant maintains that the

word used was “reconditioned“, I think it is significant that when

it was put to him that the word used had been “overhauled“, his

response was to the effect that he thought the words had the same

meaning. I think it is highly unlikely that Mr. Fraser would have

deliberately misled the applicant on this matter; and he would

have seen a substantial difference between the two expressions

since he said in evidence that reconditioning a motor costs three

times as much as an overhaul.

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The eviderice on this issue is complicated by the fact

that the respondent, in its answers to interrogatories, admits

that Mr. Fraser told the applicant that the truck did have a

reconditioned engine. In another answer it says that the engine

had in fact been reconditioned. Mr. Fraser, who no longer works

for the respondent, concedes that he supplied information for

these answers and checked them before they were Sworn by an

officer of the company. He can only explaln the particular

answers as oversights on his part.

In spite of this contradiction, I am prepared to accept

Mr. Fraser's considered evidence that the only information he

supplied to the applicant came from the 'appraisal record' which

referred to an 'overhaul'. I found him to be a careful and

credible witness. I can only assume that when he assisted in the preparation of answers to interrogatories he was relying on his

memory of events nearly three years old and did not have the

appraisal record in front of him to assist his memory.

The next allegation in the statement of claim was that

the respondent represented to the applicants that "the truck was capable of completing three interstate trips per month to Perth for the purpose of the applicants' business as an interstate road

haulier". This allegation was not supported by the applicant's

evidence. The most that could be said was that the respondent

represented the vehicle as being of a type suitable for regular

use between Melbourne and Perth. This it clearly was.

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.

The f i n a l and main p o i n t r e l i e d upon by t h e a p p l i c a n t i s

t h a t Mr. F rase r t o ld him was t h a t it was a "good" truck of

" s a l e a b l e " q u a l i t y and d l d so wi th t he knowledge t h a t It was t o be

used for haulage to and from Perth.

Mr. F rase r has s a ld t ha t he probably d l d s a y t h a t t h e

t ruck was a good one, obviously meaning by that that it was a good

second-hand vehicle, always bearing i n mind t h a t it was four years

o l d . He based t ha t on what he read i n t h e a p p r a i s a l r e c o r d ,

together with his own m q u i r i e s from the f i rm whlch had previously

serv iced the vehic le , the se rv ice which it had been given under

h i s d i r e c t i o n s , and h i s own t e s t - d r i v e of t h e v e h l c l e . The

purchase order showed t h a t it was a t e r m o f t h e c o n t r a c t t h a t t h e

v e h i c l e would be " i n s a l eab le cond i t ion" .

I do n o t t h i n k t h a t t h e u s e o f e i t h e r o f t h e s e

express ions was intended or would have been understood to amount

t o a specif ic warranty about the per iod of t rouble-free use which

the appl icant could expec t from t h e v e h i c l e o r t h e r e p a n s t h a t h e

might expec t to have to car ry ou t . B u t t h i s 1s t h e way i n whlch

the case for the appl icant has been pu t . I t h a s t o b e remembered

t h a t t h e v e h i c l e was four years o ld and t h a t t h e a p p l i c a n t was

i n t e n d i n g t o make something l lke 30 round t r i p s t o P e r t h e a c h

yea r , of about 7 ,000 kms p e r t r i p . He should therefore have

expec ted tha t the p rev ious owner mlght have used lt a t l e a s t t o

h a l f t h a t e x t e n t - say 100,000 km per year - and it m u s t have been

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showlng signs of wear' i n a number of ways. Even the overhauled

motor had probably seen over 50,000 km of use. I f i n d t h a t t h e

v e h i c l e was a t t h e t i m e of s a l e a good second-hand vehicle and of

s a l e a b l e q u a l i t y .

Although it was no t p l eaded i n t he s t a t emen t o f claim,

or opened by counse l for the appl icants , the appl icant sa ld in

ev idence t ha t he had been given a three months verbal warranty on

the v e h i c l e . The evidence for the respondent was t h a t no such

warranty was giver., b u t t h e company had been prepared t o b e a r t h e

cost of r e p a i r s f o r an unspec i f i ed pe r iod o f t ha t o rde r . The

company had i n f a c t b o r n e the cos t o f a number o f r e p a i r s whlch

occurred i n the f i r s t t h r e e months t h a t t h e r e s p o n d e n t h a d t h e

t r u c k . I t was o n l y a f t e r three months had expired, and a l l t h e

d e f e c t s o c c u r r i n g i n t h a t time had been c leared up , tha t t he

r e s p o n d e n t b i l l e d the a p p l i c a n t f o r a c l u t c h r e p a l r a n d o t h e r

minor repairs a l l of which were obviously new d e f e c t s . The

appl icant then enloyed some t w o months o f t rouble- f ree d r lv lng

( a l though t h i s pe r iod needs t o be c o n s i d e r e d i n l i g h t o f t h e f a c t

tha t it included Christmas 1980 and the N e w Year of 1981).

I t i s t o be n o t e d t h a t t h e a p p l i c a n t made no complaint

a t t h e t i m e a b o u t b e i n g c h a r g e d f o r t h e s e l a t e r r e p a l r s ; nor d l d

he go back to the respondent when faced with a m a j o r r e p a i r t o the

f u e l pump, f o r whlch he was unable to pay . H e s imply no t l f led the

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hire purchase company'that he was unable to meet his commitments

and submitted to repossession of the truck. These present

proceedings were only instituted some twelve months later.

I also note in passing that the significant defects

which appeared in the vehicle in its first six months of operatlon by the applicant, did not relate to the motor but rather to the differential, clutch and other parts of the mechanism. The clutch

failure could well have been related to an accident with the vehicle a short time before when the trailer left the road. The final breakdown of the engine must have resulted from a dropping

of the water level m the cooling system. This could have been

due to inadequate malntenance or a leak in the system.

There was uncontradicted expert evidence on behalf of

the respondent glven by Mr. De Leeuw, the respondent's service

manager, who I found to be a careful and. impresslve witness, that

(a) the repairs required by the vehicle were not out of the

ordinary	for	a four year old prime mover undergoing moderate
usage,

(b) they could have been contributed to by inadequate

maintenance (the applicant serviced the vehlcle himself after each

trip but produced no evidence of any ma~or serviclng by an

experienced mechanic; I can make no positive finding on the

adequacy of maintenance),

- 10 -

.

(c ) wi th one poss lb le except ion , the more impor t an t de fec t s

which developed could not have been present when t h e v e h i c l e was

s o l d ,	and
( d ) t h a t p o s s i b l e e x c e p t i o n related t o o i l l e a k s from t h e

d i f f e r e n t i a l	c a s i n g :	s u c h	l e a k s	a r e	n o t	uncommon	i n a	t ruck	of
t

th is type , t hey a r e no t s e r ious p rov ided the o i l l e v e l i s

m a i n t a i n e d , a n d i n t h i s c a s e , when t h e f a u l t was c l e a r l y

e s t a b l i s h e d , the cas ing was replaced without charge.

The f a c t s o f t h i s c a s e a r e v e r y d i f f e r e n t f r o m t h o s e o f

Mihel jev lc v E i f f e l Tower Motors Pty. L t d . & Anor 1973 VR 545,

u p o n w h i c h t h e a p p l i c a n t r e l i e d . I n t h e f i r s t p l a c e t h e

c i r c u m s t a n c e s s u r r o u n d i n g t h e e n t r y i n t o the c o n t r a c t a r e q u i t e

d i f f e ren t and , s econd ly , the n a t u r e o f t h e d e f e c t s , i n t h e

time-frame i n which they occu r red , a r e also q u i t e d i f f e r e n t . I n

the p r e s e n t c a s e I d o n o t b e l i e v e t h a t a n i n t e l l i g e n t b y s t a n d e r

w o u l d r e a s o n a b l y h a v e i n f e r r e d t h a t a n y w a r r a n t y a s t o

t rouble-free performance was intended by u s e of the words 'good '

or ' s a l e a b l e ' , and on t h e whole of the evidence I a m n o t s a t l s f i e d

t h a t	those	words mlsrepresented the vehlcle .
I have great sympathy for the a p p l i c a n t i n th i s case . I
th ink	he	i s an honest, hard-worklng man who h a s g o t i n t o s e r l o u s

f i n a n c i a l d i f f l c u l t i e s w i t h o u t a n y f a u l t on h i s pa r t o the r t han an

, . a *

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error of judgment. He is the victim of an 111-advlsed venture

into a notoriously dlfficult industry, together with a certaln

amount of bad luck.

On the other hand I believe that the respondent company

behaved honestly and honourably towards him throughout the

transaction which is the subject-matter of these proceedings. I

do not be'lieve that the respondent 1 s responsible for the

applicant's financlal problems either in fact or in law.

I can find no deceptive or misleading conduct,

misrepresentation, breach of warranty, breach of implied condltion

or negligence on the part of the respondent. There must therefore

be judgment for the respondent with costs.

I certify that this and the 10

precedlng pages are a true copy of the

Reasons for Judgment herein of the

Honourable Mr. Justice A.E. Woodward -

I'/ Associate

Dated: 4 November 1983