Blackman v Warrayappa Sands Pty Ltd No. Scgrg-98-1348 Judgment No. S6987

[1998] SASC 6987

BLACKMAN v WARRAYAPPA SANDS PTY LTD
[1998] SASC 6987

Magistrates Appeal

1. MILLHOUSE J.                 This appeal turns on whether a second hand Furukawa front end loader about 12 years old which went for only fourteen to eighteen hours after purchase was, as represented by the seller, "in good condition to carry out the sand mining venture" and "ready for work".  Unfortunately there was no evidence about how long such equipment should be expected to go if it were "in good condition" and "ready for work".  The learned special magistrate had to make a finding based on his own impression.

2. The respondent is a company of which Mr Kranston Neil Riches is a director.   The company was formed to quarry sand near Cowell on the West Coast.  Mr Riches is a farmer and grazier in the area.  To get on with the job Mr Riches needed a front end loader. 

3. It was in 1996.  He looked at several in the district but they were not satisfactory.  He then found a second-hand Furukawa front end loader in New South Wales advertised in a paper circulating throughout Australia as "ready for work".  The seller was the appellant who lives near Casino.  Mr Riches spoke to the appellant several times on the telephone asking about the equipment.  The learned magistrate in his Reasons put it this way:-

   "Many representations were made by the defendant to Riches, according to Riches evidence.  One of the 4 tyres would need to be relugged.  The others were satisfactory.  However, the defendant volunteered to 'throw in' a spare.  The hydraulics had only one significant leak.  The main articulating pins and bushes were in good working condition.  The linkages were likewise.  The cutting edge on the bucket was intact.  The cabin was of a type that would be approved by general industry standards for rollovers.  The engine was in 'good working order', and the vehicle was 'ready for work.'    The Furukawa was ideal for sandmining.  In fact it had been used in the sandstone mining venture.  The defendant thought the vehicle was a 1984 Furukawa.  He gave engine and serial numbers to Riches at Riches request.  The brakes had been reconditioned."

4. In their second telephone conversation Mr Riches agreed to buy the Furukawa for $32,000, delivery at the appellant's farm. 

5. The equipment was carried to the West Coast.  Mr Riches saw it for the first time when it arrived at his property.  When he started it up it emitted smoke and ran rough.  The smoke disappeared, as the appellant said it would, after it had been running for a while.  Mr Riches used it a number of times over a couple of weeks, a total of fourteen to eighteen hours, before it conked out.  When it was stripped down lots of things were found to be wrong.  During argument I used the expression "clapped out" and that accurately describes the condition of the Furukawa at that time.  The cost of repairing it was just under $12,000.

6. The respondent sued the appellant for damages relying on the Fair Trading Act (SA) 1987 and the Misrepresentation Act (SA) 1972.

7. The magistrate found that the appellant had made innocent misrepresentations upon which Mr Riches had acted. This was in breach of s56(1) of the Fair Trading Act:-

   "A person shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive."

8. He summarised his findings:-

   "In summary, I find that with the exception of the engine, and spare tyre, the defendant did not misrepresent any aspect of the Furukawa to Riches in a manner which Riches relied upon to base the plaintiff's purchasing decision.  I find the clear misrepresentation regarding the year of the Furukawa was not a matter which operated on Riches mind.  Instead, it was the defendant's misrepresentation regarding the ability of the Furukawa 'to work' within its designed capacity at the plaintiff's sand mine which influenced Riches acceptance of the defendant's reduced price offer (subject to available finance) on the 8th day of March 1996.

   I specifically find that the defendant did represent to the plaintiff that the Furukawa was in good condition to carry out the sandmining venture.  He well knew the plaintiff's witness Riches was relying upon his description of the engine in particular to carry out the plaintiff's venture.  I specifically find that the engine developed faults ... and that the basis for these had existed upon arrival of the Furukawa at Riches farming property."

9. He gave judgment for the respondent for the cost of repairs.

10. Mr Jonathan Hyde for the appellant had to argue, as he did vigorously and cogently, that the machine, having gone for fourteen-eighteen hours, could not have been said not to have been "in good condition" and "ready for work" at the time of sale and purchase.  Mr Craig McCarthy for the respondent, argued to the contrary. 

11. During discussion with counsel it became obvious that it is a matter of where one draws the line.  Mr McCarthy conceded that if it had gone for 500 hours then probably it would be a different matter: likewise Mr Hyde conceded that if it had gone only for one hour that would be different.  It is simply a matter of where that line is.  Thankfully neither the learned magistrate nor I have to draw it.  All the magistrate did was to say, in effect, that fourteen - eighteen hours was on the wrong side of the line. My impression is the same as the learned magistrate's.  It is difficult to imagine the respondent willingly paying $32,000 for 18 hours of effective work.  I do not think one can say that a piece of equipment such as this 12 year old Furukawa front end loader could properly be represented as "in good condition to carry out the sandmining venture" and "ready to work" when it ceased to go after so few hours on the job.

12. It was purely a matter of fact and argued by counsel as such.  Mr Hyde did not challenge nor can I see any reason why he should, either the learned magistrate's exposition of the law or his application of the law to the facts as found.  I therefore need not canvass the law in deciding the appeal.  I dismiss it.