Cassar v Pegoraro
[2011] VCC 819
•30 June 2011
| IN THE COUNTY COURT OF VICTORIA | Revised |
Not Restricted
AT MELBOURNE
CIVIL DIVISION
COMMERCIAL LIST - EXPEDITED DIVISION
Case No. CI-10-03797
| PETER CASSAR and CAROLYN CASSAR | Plaintiffs |
| v | |
| ADRIAN PEGORARO | Defendant |
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| JUDGE: | HIS HONOUR JUDGE ANDERSON |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 20-22 June 2011 |
| DATE OF JUDGMENT: | 30 June 2011 |
| CASE MAY BE CITED AS: | Cassar v Pegoraro |
| MEDIUM NEUTRAL CITATION: | [2011] VCC 819 |
REASONS FOR JUDGMENT
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| Catchwords: | Purchase of motor vehicle – Whether sale by description – Vehicle advertised as 1970 Ford Falcon XY GT – Conversations between the parties and documents shown to the purchaser relating to genuineness of the vehicle – Vehicle probably a modified 1971 Falcon 500 – s.18 Goods Act 1958; s.32H Fair Trading Act 1999. |
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| APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr P. Duggan | Harris & Company |
| For the Defendant | Ms R. Sion | Cornwall Stoddart |
| HIS HONOUR: |
1 In December 2004, Adrian Pegoraro advertised a motor vehicle for sale on the internet. The car was listed as a “1970 Ford Falcon XY GT” and the advertisement further described the car as a “fully restored classic Falcon XY GT in immaculate condition”. Peter Cassar, through his wife, Carolyn, purchased the vehicle for $70,000. At the time of purchase they believed it to be a “genuine” or “original” Falcon XY GT. Some years later, Mr Cassar began to have doubts about whether the vehicle sold to his wife was that particular model. Expert investigations suggested that the vehicle was a modified 1971 Falcon 500, a vehicle of much lesser value.
2 The Cassars claim that they purchased the vehicle by “a contract for the sale of the goods by description” and that, by s.18 of the Goods Act 1958 or alternatively s.32H of the Fair Trading Act 1999, “there is an implied condition that the goods shall
correspond with the description”. They say that what they purchased was described
as a “Falcon XY GT” and what they received was a modified 1971 Falcon 500.3 Pursuant to s.59 of the Goods Act, the Cassars bring an action against Mr Pegoraro “for damages for breach of warranty”, being “the estimated loss directly and naturally resulting in the ordinary course of events from the breach” or alternatively s.159 of the
Fair Trading Act for “loss or damage” arising “because of a contravention of a provision of this Act”.
4 The following issues must be determined in the proceeding:
a. the circumstances of the sale; b. whether it was “a contract for the sale of goods by description”; c.
whether the appropriate description of the goods sold was a “Falcon XY GT”;
d. whether the vehicle purchased corresponded with that description; e. the measure of damages to which the Cassars may be entitled.
The circumstances of the sale
5 When Mr Cassar was aged 20, he created a replica Falcon XY GT from a similar Fairmont vehicle. More than 20 years later, he set out to buy a genuine Falcon XY GT. His son, Matthew found Mr Pegoraro’s advertisement on the internet. The advertisement listed the car as a “1970 Ford Falcon XY GT” with the further description, “fully restored classic Falcon XY GT in immaculate condition”. The advertisement also contained the following comments: “Fully restored including
mechanicals, body paint and trim (too much to list). Factory Monza green, S2 trim (saddle with cloth inserts), factory manual and sun roof. Believed to be the ONLY one ever built in this combination making this an extremely rare and desirable car. Originally owned and driven by famous Australian motoring identity and have the
paperwork confirming this. Drives like new with plenty of power (220 kw @ rear wheels). Absolutely mint condition throughout with nothing to spend. Entrant @ 2003 Falcon GT Nationals held at Bathurst. For a full description/report on this car,
we note that a VIP inspection (ph 0500 555 227) has recently been completed.
Would have to be the best XY for sale at the moment. No time wasters please. Veryregrettable sale. Full inquiries regarding this phone Adrian on …”.
6 Mr Pegoraro said that Peter Cassar telephoned him and asked him how long he had owned the vehicle and, “Is it original?” Mr Pegoraro said that he told Mr Cassar that he “believed it was”. They arranged a time for Mr Cassar to inspect the vehicle. Mr Cassar agreed that he telephoned Pegoraro and asked him, “Is the vehicle genuine?”
Mr Pegoraro told him that it was and that he had bought the vehicle in 1997.
First inspection
7 Soon afterwards, Mr Cassar went to Pegoraro’s house with his wife, son Matthew, and their other children. They stayed for about an hour. During that time, Mr Cassar said Pegoraro went through the car with him and showed him certain documents. The documents included:
a.
A letter dated 3 July 2001 from Ford Motor Company’s Customer Assistance Centre. The letter read in part as follows: “Thank you for your recent contact
with our office regarding your December 1970 Ford Falcon XY GT, serial opportunity to be of assistance and congratulations on your ownership of a
prefix JG33KG, serial number 50048, SIDO071184. We are pleased to inform
you that the abovementioned vehicle was originally built as a genuine Fordpiece of true blue Australian automotive history”.
b. A letter dated 6 August 2003 from “Falcon GT historian” Jim Donovan. The letter was in very similar terms to the letter from Ford Motor Company. c. A Falcon GT calendar for 2004 which featured a photograph of Mr Pegoraro’s car for the month of August and a descriptive piece about the vehicle which read in part as follows: “Adrian Pegoraro has promised his 1970 XY GT to his three year old son, Julian, so don’t ever expect him to part with it. According discovered its original owner was Bib Stillwell. Although unable to get the BS000 number plates the car is back on its second registration. It was originally supplied in manual and with sunroof, twin mirrors, five spoke sports wheels and light saddle trim with cloth inserts for the seats. Recently Adrian has fitted the front and rear spoilers and the globe Bathurst alloy wheels, re- trimmed the interior and fitted a set of NOS seatbelts. It was re-sprayed Jewel Green at an early stage but Adrian intends returning it to its slightly different
to Adrian, Julian has taken such a liking to the car that he hardly lets dad take
it out without him and it’s driven as often as practical, including Melbourne tooriginal colour, Monza Green, in the future…”.
d.
A search of archived engine number records with the Association of Motoring Clubs Inc (AOMC) which showed that the car had previously belonged to motoring identity Mr Bib Stillwell.
e.
A poster prepared by Mr Pegoraro in relation to the car which featured photographs, a copy of the Ford Motor Company letter, the letter from AOMC and the following text: “This car was originally delivered to BS Stillwell Ford in
December 1970 and was first registered and personally driven by Bib Stillwell in May 1971. Confirmation of these details have been verified by both the Stillwell family and the AOMC (see letter attached). Special thanks must go to my father Tony, along with the team at Preston Panels in the preparation and
restoration of this vehicle”.
8 Mr Cassar said the car had a sticker on the window indicating that it was registered with the Falcon GT Club. Membership of the club is apparently only possible if the member owns a genuine GT Falcon. Mr Cassar said that Pegoraro did not say
anything about the vehicle being a replica or not genuine. Mr Cassar said he
assumed from what he had been told and shown that the car was a genuine XY GT
Falcon.9 In cross-examination, Mr Cassar said he asked Pegoraro, “Is the car genuine?” and he replied, “It’s a genuine car”. Mr Cassar said he could not recall Pegoraro telling him what works he had done to the vehicle. Mr Cassar said he had never seen a
handwritten document purporting to list everything Pegoraro said he had spent on the car. Mr Cassar said that he asked Pegoraro if he could have the vehicle inspected by Charlie Caruana of Perotta Motors. Mr Cassar said he wanted Mr Caruana to inspect the “mechanics” because the vehicle was being sold without a roadworthy certificate. Mr Cassar said that he declined the opportunity to test drive the vehicle although Mr Pegoraro did start the motor and let the engine run for a while.
10 Mr Matthew Cassar was 15 when he inspected the car with his parents. He said Pegoraro described the car to them and said that all the numbers corresponded to the identification plates. Mr Pegoraro showed them the calendar and poster of the car. Pegoraro could not remember the person he had bought the car from.
11 Mr Pegoraro said in his evidence that the first inspection took about one hour. He told Cassar how long he had owned the vehicle, what work he had done to the car, his acceptance into the Falcon GT Club and his showing of the car at the GT
Nationals at Bathurst in 2004. Mr Pegoraro said he showed Mr Cassar the following documents:
a. a list of the items and amounts he had spent on the car; b. the letter from Ford Motor Company’s Customer Assistance Centre; c. the letter and search from the AONC; d. the Falcon GT calendar; e. the poster he had prepared for display at the GT Nationals. 12 Mr Pegoraro said he had shown these documents to prove or show some sort of reason why he believed the car was an original. Mr Pegoraro said that Cassar asked him, “Is it authentic?”. He responded, “I believe it is, based on the information I have received but you are welcome to do your own checks”. Mr Pegoraro said Cassar told him he wanted to get “Charlie” from Perotta Motors to inspect the car as he had worked on these cars since they were nearly new. Mr Pegoraro said Cassar told him he wanted Charlie to give advice as to whether the car was worth buying. Pegoraro said he asked if Charlie had a workshop and told Cassar that he could “either have Charlie come here or I could take the car to him”. Mr Pegoraro said that he offered Cassar the opportunity to drive the car although he declined. Pegoraro started the car and let it run. Mr Cassar said the vehicle was a very nice car; he would go away and think about it and talk to his wife.
Telephone negotiations
13 Mr Cassar said he telephone Pegoraro a few nights later. He asked him if he was firm on his price. Cassar then offered to pay $70,000 for the vehicle and this sum was accepted. In cross-examination, Mr Cassar said that he offered $70,000, subject
to a roadworthy certificate. Mr Pegoraro told him he did not need to get the vehicle
inspected. He said that his father had done all the mechanical work and he had got a
roadworthy certificate.14 Mr Pegoraro said that when Cassar telephoned him, Cassar said he had spoken to his wife and then offered $65,000 for the car. They haggled and then agreed on $70,000. Mr Cassar said he would need some time to get the money together. They talked about the roadworthy certificate which Pegoraro agreed to arrange. Mr Cassar said it was “more than likely” that Charlie would come and look at the vehicle “next time”.
Payment of the deposit
15 On 16 December 2004, Mr Cassar and members of his family attended at Pegoraro’s home. A deposit of $7,000 was paid and a handwritten receipt, drawn up by Pegoraro, was signed by him as seller and Mrs Cassar as buyer. The receipt read as follows: “This is to confirm that I, Adrian Pegoraro, of …have received a cash deposit
of $7,000 (cash) from Caroline Cassar being for Ford Falcon XY GT 1970 model reg.
no. KZE 682. Total price $70,000. Deposit paid $7,000. Balance due $63,000”.
16 Mr Cassar said that when the deposit was paid, he did not tell Pegoraro that he would bring Charlie when he came to pick up the car. Matthew Cassar said that he was present at the meeting when the deposit was paid. Matthew Cassar said that his father told Pegoraro that Charlie Caruana would be coming to inspect the vehicle and Mr Pegoraro said that his father had done the mechanicals on the car.
17 Mr Pegoraro said his father had been a mechanic but had never worked on the car. He did not tell the Cassars that his father had worked on the car. His father knew, from what he had seen of the car, that the mechanicals were good. Mr Pegoraro’s father, Antonio, confirmed he had not done any mechanical work on the car and did not provide a roadworthy certificate for the vehicle.
Payment of the balance of the purchase money
18 On 24 December 2004, Mr Cassar and his family collected the vehicle and paid the $63,000 balance of purchase price. Mr Pegoraro drew up a handwritten receipt which he and Mrs Cassar signed. The receipt read: “This is to confirm that I, Adrian
Pegoraro, have received $63,000 being final payment for 1970 Ford Falcon XY GT
reg. number KZE 682. Sold with RWC number 560960. Balance due $0”.
a. he had checked with VicRoads that the car had no encumbrances; b. he had checked with Ford (and apparently had obtained a copy of the letter from the Customer Assistance Centre); c. his wife had spoken to VIP and had, on about 21 December, been sent a copy of a report on the vehicle earlier prepared for a potential purchaser. The report had been referred to in Mr Pegoraro’s internet advertisement. 22 “bought it in good faith”. The VIP report, dated 16 November 2004, was completed
on a standard form inspection document by Mr Spiro Vasilakis. The first page of the
document recorded the make of car as “Ford”, the year as “1970”, and the model as19 Mr Cassar said that when he picked up the vehicle, Mr Pegoraro did not ask where Charlie was. Mr Cassar said he did not inspect the VIN [vehicle identification number] on that occasion. Matthew Cassar agreed during cross-examination that, when the vehicle was picked up, Pegoraro asked, “Where’s Charlie?” and his father had replied that there was “no need” as he had “done checks”. Matthew Cassar said it had only been intended that Charlie Caruana would inspect the mechanics and would not authenticate the vehicle.
20 Mr Pegoraro said that when Mr Cassar and his family attended to pay the balance of the purchase money, he asked Mr Cassar “about Charlie” and why he had not come. Mr Cassar told him he had done his own investigations and had obtained the VIP
report and a copy of the letter from Ford. Mr Cassar may also have said he had contacted the Falcon GT Club to see if Pegoraro was a current member with the vehicle. Mr Pegoraro said that Mr Cassar also inspected the identification plate and
VIN number on the car to confirm if they matched with the Ford letter.
21 In cross-examination, Mr Cassar said that prior to the inspection:
Mr Cassar said that he did not buy the car on the basis of the VIP report but had concluding with the comment, “recent cosmetic restoration, a nice example” and of the interior, with the comment, “almost like new”. On page 3, the road test included a comment, “drives very smooth, tight, comfortable and super response”. There was a disclaimer which included the statement that: “This report is merely to advise you the
buyer of the overall basic condition of the said vehicle, with an aim to giving you, to
the best of our ability, a fair, unbiased and honest description of the vehicle”. Under the heading, “Condition Status of Vehicle”, the vehicle was included in the category “show (trophy)”. On page 4 was the comment: “This car is classed as a show trophy
car 9/10 condition, ultimate Sunday driver”. On the final page, it was noted that,
“Engine is ‘D’ block, however it has been restamped” and that, “This car isdocumented as Bib Stillwell’s personal car from 1970 to 18th March 1971. For his own
personal car, Bib Stillwell Ford in Kew Vic. no. plate was BS000”. The final summary
read: “A very nice example in this fine and rare marque, extremely hard to find a 4spd sunroof car. Presents very well, goes hard, looks great. Needs little to make
concourse. Worth considering”.
23 Later in his evidence, Mr Cassar said that when he bought the car, Pegoraro “didn’t
mention nothing about the engine being restamped. All he said to me was the
Apparently the vehicle had been refitted with a replacement motor at some stage.
number was there, but he said to me there’s another number behind the alternator”. the radiator and the restamping on the makeup engine was made out of fibreglass. Mr Pegoraro said that at the first inspection he told Cassar that the engine was incorrect and the numbers had been restamped on the block.
Subsequent contact between Cassar and Pegoraro
24 same year as the XY. From a comment made by someone who had inspected both
cars, Mr Cassar began to have doubts about the authenticity of the car he had
purchased from Pegoraro. He telephoned Mr Pegoraro and asked him if he could tellIn August 2008, Mr Cassar purchased an XW Falcon which had come out in the Falcon”. Cassar responded, “It just doesn’t stack up to the other cars I’ve looked at”. Mr Cassar asked Pegoraro about his purchase of the car in 1997. Pegoraro told him he could not remember the name of the person who sold him the car, that no documents were produced to him before the purchase and a friend from the GT club (whose name he could not remember) had verified the genuineness of the vehicle. Mr Cassar said that Pegoraro told him he had sold over 70 cars since the sale to him and he could not remember the car.
25 Mr Pegoraro said that, in about January 2007, Cassar phoned complaining that the motor was not original. Pegoraro said he had told Cassar that when he bought the car, Pegoraro had said the engine was incorrect and had been restamped and the restamping had been referred to in the VIP report. Pegoraro said that a week later,
Cassar telephoned him asking if he knew someone who could restamp the block in the correct position. Pegoraro told Cassar that he was unable to assist because it was illegal activity.
26 got along well
December 2008, Pegoraro said Cassar telephoned again and Pegoraro asked him,Pegoraro said he later saw Cassar at car shows and they “”. In anomalies with the numbers. Pegoraro told him, “You have owned the car for four years, I can't help you”. Mr Pegoraro said he did not tell Cassar that he had sold over 70 cars. He had never been in the business of buying and selling cars.
Police investigation and other expert evidence
27 vehicle at the request of Mr Cassar. Mr Cuthbert did not prepare a written report until
21 May 2010. Mr Alex Cifonelli, a forensic officer employed at the Victoria Police
Forensic Services Department as a vehicle examiner, examined the vehicle onIn November 2009, Mr Graham Cuthbert, an automotive consultant, examined the his investigations on 20 May 2010. Mr Cifonelli concluded that “the vehicle was a 1971 XY Ford Falcon 500 that was altered and restored into a 1970 XY GT”.
28 Although Mr Cuthbert had not seen Mr Cifonelli’s report when he produced his report the following day, he recorded in the report that “the vehicle underwent forensic testing and was found to consist of a Ford Falcon 500 body shell as the base unit”. Mr Cuthbert’s report provided “comparative evidence showing the differences
between the original GT vehicle and this vehicle, a Falcon 500 that has been modified
to give the appearance of being an XY GT”. The reasons for Mr Cuthbert’s
conclusions were as follows:
a. The VIN stamped on the left hand strut tower was of concave appearance. A stamping on an originally manufactured vehicle would have a convex appearance. Mr Cuthbert said, “It is clear that the identification plate from another vehicle has been falsely matched to this vehicle”. b. The relevant area of the left-hand strut tower appeared to have a panel with non-original welds affixing it over the location where the VIN on later models would be found. c. The vehicle was “originally blue in colour” as could be seen at a number of points of inspection including the steering column, the left-hand front, left-hand rear and right-hand rear doors, the glove box piano hinge and many other areas. The GT vehicle supposedly was Monza Green. d. The left front centre pillar showed “newly drilled holes to fit XY GT trim” and the “original hole of standard Falcon 500”. e. Certain panels and moulds had been removed and incorrect retainers fitted. 29 the vehicle showed evidence of having
undergone a major restoration”. Mr Cifonelli made a number of comments about
inconsistencies in the location and stamping of numbers on the vehicle. It was not
clear, however, whether these inconsistencies in the identification numbers resulted
Mr Cifonelli said that upon his examination, “Mr Cifonelli considered that his examination of the “services adjacent to the console
bracket displayed grinding or similar and showed non-factory welding of the console
bracket to the transmission tunnel”. His examination of “the rear body structure
adjacent to the rear window [showed] that the body mould pins were welded in post-
manufacture”. Mr Cifonelli’s examination of the boot area “displayed the welding of
holes consistent to the placement of factory-fitted Falcon 500 body badges”.30 Mr Cifonelli formed the opinion that the vehicle “was a 1971 XY Ford Falcon 500 that was altered and restored into a 1970 XY GT”. In his oral evidence, Mr Cifonelli said he also discovered original blue paint under the green paint in a number of areas, including behind the dash and on the steering column. There was also white paint on the door trim. He concluded that the original car had been a Falcon 500 with blue interior and white exterior.
31 The defendant relied upon two expert reports, one by Mr Spiro Vasilakis, who had prepared the original VIP report, and one by Mr Frank Portelli. Mr Portelli has been a “member of the Falcon GT Club of Australia for 25 years” and has been “involved in the scrutineering of vehicles for the club”. He has also been “an owner and involved
with these cars for 35 years [and had] been involved in restorations for 30 years and
Mr Portelli carried out car detailing for Mr Cassar on the vehicle at a total cost of
$21,000. He inspected the vehicle again on 2 March 2011 at the request of[had] had many concourse winners of the GT nationals”. Prior to May 2005, was or was not an original XY Falcon GT”. He inspected the vehicle for the purpose of assessing its current value.
Credit issues and determining disputed factual matters
32 Although there is substantial agreement between the evidence of Peter Cassar and Matthew Cassar on the one hand and the evidence of Adrian Pegoraro on the other, there are some residual disputes as to what was said during the negotiations in
December 2004.
33 No submissions were addressed to me about the creditability of those witnesses. Mr Pegoraro admitted that when he purchased the vehicle in 1997 at the age of 30, he deliberately understated the amount he had paid for the car when he registered the transfer, presumably so that he would not need to pay as much stamp duty. In relation to Mr Peter Cassar, it was suggested that, after the car was purchased from Mr Pegoraro, he had arranged to have the identification numbers on the vehicle altered. The alteration of identification numbers on a vehicle is against the law and, on the particular car in issue, appears to have resulted in the vehicle being put in a state where it now can never be registered and can only be used for spare parts.
34 This latter matter may have some relevance in determining the calculation of any damages to which the plaintiffs may be entitled. It is difficult, however, upon the present state of the evidence, to form any concluded view about the involvement of
Mr Peter Cassar in the alteration of the identifiers in circumstances which might give rise to criminal activity on his part or reflect upon his credit as a witness. In relation to the issue of the understating of the consideration for the transfer in 1997, if an offence were committed, as appears likely in view of Mr Pegoraro’s admission, the fact that
he readily made the admission in his evidence goes to his credit.
35 There was also some suggestion, in the questioning of Mr Pegoraro, of the frankness of his account about his purchase of the vehicle. He was unable to identify the vendor and he appeared to be criticised for his failure to have verified the authenticity of the vehicle at that stage. It does, however, appear clear that after Mr Pegoraro purchased the vehicle, he single-mindedly set out to clarify the provenance of the vehicle and, at the time of its sale to the Cassars, shared the information he had gathered including the fact that the motor was not original. There is no evidence to suggest that Mr Pegoraro, at the time he sold the vehicle to the Cassars, had any doubt about it being an original XY GT or misrepresented the information he had about the vehicle.
36 It is appropriate to identify the differences in the versions given by the parties. Significant differences included:
a.
Mr Cassar said that he asked Pegoraro whether the car was genuine and Cassar said that Pegoraro responded that it was. Mr Pegoraro said that his response was qualified; that he believed it to be genuine and that Mr Cassar was quite free to make his own enquiries.
b.
There is some discrepancy in the versions of the conversations as to whether Mr Cassar would bring Charlie Caruana to inspect the vehicle and whether the purpose of the inspection was to look at the mechanicals or for some other
purpose such as to authenticate the vehicle. It was suggested that Mr had been provided, but because in the meantime Mr Cassar had made his own investigations including obtaining a copy of the VIP report and therefore did not need Caruana to inspect the vehicle. There is not, in my view, sufficient basis in the evidence to permit this conclusion. It is equally open to infer that Mr Caruana was to attend to inspect the vehicle’s mechanical state rather than for the purpose of authenticating it as a genuine GT model.
c. work on the car whereas both Mr Pegoraro and his father, Antonio, said that
he had done no mechanical work on the car although he was a mechanic and
on the poster he prepared for the GT Nationals, Pegoraro had given “special
thanks” to his father, “along with the team at Preston Panels in the preparation
and restoration of this vehicle”. Mr Pegoraro suggested what he said was that
his father had, from his observations and without having worked on the car,
confirmed that the vehicle was in good mechanical condition. Again, it is
difficult to point to any particular reason to prefer the evidence of Mr Cassar orMr Cassar said that Pegoraro told him his father had done the mechanical and it would seem an unlikely thing for Mr Pegoraro to have said that, although his father was a mechanic and had not worked on the car, he could confirm from what he had seen of the car, that the mechanicals were good.
d.
It seems that Mr Pegoraro disclosed the fact to Mr Cassar that the vehicle had a new engine and there was a discrepancy with the engine number. It is likely that Mr Pegoraro was aware, when he referred to the VIP report in the
advertisement for the car, that the report identified the engine as not original
and that it had been restamped. On this basis, there is no reason to doubt the
credibility of Mr Pegoraro.37 In the circumstances, I do not believe that it is appropriate to prefer the version of the Cassars over that of Mr Pegoraro insofar as there are any discrepancies between their evidence. Generally, their recollection of events was similar. Where it differed, it seemed to be a matter of emphasis and it is likely, because of the lapse of time since the happening of the events, that each party simply recalled what was said slightly differently.
Sale by Description
38 The Cassars rely upon a condition implied into their contract with Pegoraro that the goods sold to them “correspond with the description”, because the contract was “for the sale of goods by description”. The claim was based upon s.18 of the Goods Act or alternatively s.32H of the Fair Trading Act 1999. The Cassars did not pursue an alternative claim based on misleading or deceptive conduct in breach of s.9 of the
Fair Trading Act. It is likely in my view that s.32H of the Fair Trading Act has application in the present case. By s.32FA(1), if Part 2A of the Fair Trading Act applies to the parties’ contract, s.18 of the Goods Act does not apply. By s.32EB, if it is alleged in a proceeding that Part 2A applies, “it is to be presumed, unless the contrary is established”, that Part 2A applies. Section 32D makes Part 2A applicable “to a contract of supply of goods or services where the cash price of the goods … is
more than $40,000 and the goods … are of a kind ordinarily acquired for personal,
domestic or household use or consumption”.
39 use. The issue is of little consequence as essentially the provisions of s.32H of the
Fair Trading Act are to the same effect as s.18 of the Goods Act. Section 18 uses theIn the present case I am satisfied that the Cassars purchased the car for personal of supply of goods by description”. In my view, there is no present relevance arising from the different words in the sections, particularly as s.19 of the Goods Act, in its introductory words, refers to “goods supplied under a contract of sale”.
40 The critical issue in the present case is whether the contract for the sale of the GT Falcon was “a contract of supply of goods by description”. The meaning of this precise phrase has not been authoratively determined. However, there have been many decisions on the phrase, “a contract for the sale of goods by description” in s.18 of the Goods Act and the phrase, “where goods are bought by description from a seller who deals in goods of that description”, in s.19(b) of the Act and the equivalent provisions in other jurisdictions.
41 The most cited passage is from the opinion of the Privy Council in Grant v Australian Knitting Ltd (1935) 54 CLR 49 at 61 where Lord Wright said: “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, eg, woollen
undergarments, a hot water bottle, a second hand reaping machine, to select a fewobvious illustrations”. That case involved the sale of men’s underwear impregnated with a chemical which caused acute dermatitis to the purchaser. The plaintiff’s claim against the retailer (the claim against the manufacturer was in negligence) relied
upon the South Australian equivalent of s.19 of the Goods Act, that a warranty or
condition was to be implied as to “the quality or fitness for any particular purpose of
goods supplied”. The plaintiff had been successful in the Supreme Court of South
Australia but the decision had been overturned on appeal by the High Court. The
Privy Council recommended that the decision at first instance be restored.42 There were issues on appeal as to whether the exceptions in the equivalent to sub- paragraph (a) of s.19 applied, as well as the exception in sub-paragraph (b), if the factual basis for the claim were proved. In the High Court, as part of the majority, Dixon J considered that the goods were “bought by description so as to raise an implied condition of merchantable quality” under the equivalent of the exception in sub-paragraph (b). The majority did not consider that the exception in sub-paragraph (a) could have application. They also concluded that upon the evidence, the plaintiff’s claim against the retailer should fail. The Privy Council disagreed with the High Court and concluded that the requirements of exception (a) were also complied with and, on the facts, the plaintiff should succeed. In these circumstances, the statements of Dixon J in the High Court about the interpretation of the equivalent of exception (b) and the meaning of goods “bought by description” still have application.
43 It should be noted in relation to both the comments of Lord Wright in the Privy Council and the statements in the High Court, concerning the exception in the equivalent of sub-paragraph (b) of s.19 where goods are “bought by description”, it must be “from a seller who deals in goods of that description”, and there is a proviso to the section that, “if the buyer has examined the goods, there shall be no implied condition as regards defects which such examination ought to have revealed”. The statements of principle by the judges should be read in this context.
44 In the High Court at page 417, Dixon J stated that, “When the ground upon which the
goods are selected or identified is fair correspondence to a description and, therefore,
it may be said that the buyer primarily relies upon the classification or possession of
attributes, then, notwithstanding that they are bought as specific goods ascertainedand identified, the goods are bought by description”. Dixon J addressed the issue of how a court would determine “when the sale is ‘by’ the description and when not”. He said that, “Apparently the distinction is between sales of things sought or chosen by
the buyer because of their description and of things of which the physical identity is all
important”.
45 The issue in the present case is therefore whether, notwithstanding that there was a specific car advertised for sale, the physical identity of that individual car was the critical factor in the purchase or whether it was sold by its description as a XY GT Falcon. Examples from other cases assist in demonstrating this distinction. In Metal Roofing and Cladding Pty Ltd v Amcor Trading Pty Ltd [1999] QCA 472, the product involved in the transactions was identified in “relevant purchase notes, sales orders and invoice” as “so many tons of ‘PVC resin S1000’”. McPherson JA, at paragraph 4, in discussing whether the transaction amounted to a contract for the sale of goods by description said that: “It was a contract to sell goods that were not ‘specific’ but
‘unascertained’ at the time of agreement, and it was one into which the description of the goods as ‘PVC resin’ plainly entered. Those were the words used to identify the
kind of goods to be supplied”. Thomas JA and Cullinane J at paragraph 66 stated: “Under s.16 of the Sale of Goods Act 1896, the term ‘sale of goods by description’
has been regarded as being concerned with the question of identity, and, so far as
specific goods are concerned, to refer to a sale of goods as belonging to a particularkind, class or species. In Christopher Hill Ltd v Ashington Piggeries Ltd [1972] AC
441, 502, Lord Diplock stated, ‘It is open to the parties to use a description as broador narrow as they choose. But ultimately the test is whether the buyer could fairly and
reasonably refuse to accept the physical goods proffered to him on the ground that
their failure to correspond with that part of what was said about them in the contractmakes them goods of a different kind from those he had agreed to buy’”.
46 In Lockhart v Osman [1981] VR 57 at 61, King J considered that the wording used in an advertisement for a cattle auction, “was so clearly intended to interest persons
with such a purpose [of building up a breeding stock], that the representation in the
advertisement, interpreted in the way in which I have interpreted it, should be treated
as an express term of the contract of sale. In addition, the effect of this interpretation
was to make the contract one for the sale of goods by description, the descriptionbeing cows well suited for breeding”.
47 The case principally relied upon by plaintiff’s counsel, Mr Duggan, was Beale v Taylor [1967] 3 All ER 253, a decision of the English Court of Appeal. A car was advertised for sale as a “Herald convertible, white, 1961, twin carbs”. At page 255, Sellers LJ,
with whom the other judges agreed, said that, “The question in this case is whether
this was a sale by description or whether, as the seller contends, this was a sale of a particular thing seen by the buyer and bought by him purely on his own assessment
of the value of the thing to him…On the facts of this case, the buyer, when he came
along to see this car, was coming along to see a car as advertised, that is, a car
described as a ‘Herald convertible, white, 1961’. When he came along he saw what
ostensibly was a Herald convertible, white, 1961, because the evidence shows that
the ‘1200’ which was exhibited on the rear of the motor car is the first model of the
‘1200’ which came out in 1961; it was on that basis that he was making the offer and
in the belief that the seller was advancing his car as that which his advertisement
indicated. Apart from that, the selling of a car of that make, I would on the face of it
rather agree with the submission of the seller that he was making no warranties at all
and making no contractual terms; but fundamentally he was selling a car of thatdescription”. As Sellers J had explained at page 254, the vehicle “was in fact a car
which was made up of two cars. The back portion apparently was of that description
[‘a 1961 1200 Triumph Herald convertible’] but the front portion, which had been
welded on about halfway, somewhere under the driver’s seat, and which contained
the engine, was an older, earlier model, the 948CC model, and these two parts hadbeen made into the one structure”.
48 Although the trial judge had considered “that the advertisement was not important” and had believed that it was not being relied upon, the Court of Appeal, at page 256, accepted that the purchasers had formed “their own judgment of the condition of the
car … but forming their own judgment whether it was a car of that sort or not, I think
not; they took it for granted on the representation that was made to them by the seller
by his advertisement and by the rear of the motor car which was in front of them, thefront not disclosing that it was of a different, earlier model”.
49 In the present case, Mr Cassar wanted to buy a GT Falcon. He inspected the vehicle because Mr Pegoraro had advertised it as a 1970 XY GT Falcon. At the inspection, there was probably no way that he could have ascertained that the vehicle was not a GT Falcon. All of the documentation provided at the inspection, supported the description of the car in the advertisement. That description was repeated in the receipts for the deposit and for the balance of purchase money. The purchase was completed on 16 December 2004 when agreement was reached and the deposit was paid. Prior to that time, there was little opportunity for the Cassars to have ascertained that the vehicle was not a GT Falcon or to obtain other information which might have caused them to purchase it on the basis that it was particular vehicle which they had inspected, regardless of its description as a GT Falcon.
50 Defendant’s counsel, Ms Sion, relied upon the argument accepted by the Magistrate in the Local Court of New South Wales case of Tsoutsouras v Wilson [2007] NSW LC 24 that, “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
XY GT Falcon” (paragraph 26). One of the factors which led the Magistrate to that conclusion was that, although the vehicle was advertised for sale for $32,000, the vehicle was sold to the plaintiff for $28,000 and that, “if it was a genuine 1972 XA GT
Falcon, the vehicle would have been worth more than $28,000” (paragraph 30).
51 In the present case, the vehicle was advertised for $75,000. There is evidence to support the view that this was above or at the top of the range of values at that time for a genuine GT Falcon and that the value of a replica or modified vehicle would be valued at about fifty to sixty per cent of that sum. Mr Cuthbert said the market value of a 1970 XY GT Falcon in December 2004 was $45,000 to $50,000. In June 2005, Mr Vasilakis valued the vehicle at $85,000.
52 It could not be said that the Cassars agreed to pay the purchase price of $70,000 on any other basis than that they were to obtain a genuine GT Falcon. I am not satisfied that anything that occurred before the vehicle was collected on 24 December 2004
altered that belief. The VIP report was in fact referred to in the original advertisement
and the comments in the report would not alert a prospective purchaser to have any
doubts as to the genuineness of the vehicle as a GT Falcon. The reference to the
replacement engine and re-stamping were apparently also referred to by Mr Pegoraro
in discussions with the Cassars but not in a way which would cast doubt upon the
authenticity of the vehicle. For these reasons the plaintiffs must succeed upon their
claim.
Damages
53 Under s.159(1) of the Fair Trading Act: “A person who suffers loss, injury or damage
because of a contravention of a provision of this Act may recover the amount of the
loss or damage”. In the circumstances, I do not consider that the measure of
damages under this section would be any different than recovery pursuant to s.59 of
the Goods Act. The plaintiff has claimed damages calculated as follows:
Present Value of a 1970 XY GT Falcon $135,000
Plus Expenditure on the Vehicle since the date of purchase $54,921
$189,921
Less: Present value of the vehicle for parts $20,000 Amount claimed: $169,921
54 providence and origin would have a value between $130,000 and $160,000. He said
that the range he had given in his report that the value of a genuine vehicle in
December 2009 was between $100,000 and $125,000 was affected by a rise in the
market which had occurred over the last few months. In support of that proposition,
Mr Cuthbert referred to the sale of an unrestored XY GT in May 2011 for $90,000.In his evidence, Mr Cuthbert said that in June 2011 an XY GT Falcon of known as they had been increasing too quickly, but had started to recover and the general classic car market had improved in 2011.
55 Mr Vasilakis in his report said that the current value of the vehicle would be between $80,000 and $100,000, if it were genuine. He considered that the unrestored vehicle sold in May 2011, which he had also personally inspected, was not an indication that the market was buoyant. In his view, the market had decreased in recent months and
generally the car market was down by thirty per cent, as was the economy generally. the wrong side would affect its value by between five to ten per cent.
56 I find it difficult to determine this issue on the basis of the evidence I have heard, particularly as both expert witnesses rely upon one recent sale to reach different conclusions. In the circumstances, the plaintiff’s having the onus of proof, it seems to
me that I must assess damages on the basis of no more than the range of values
conceded by Mr Vasilakis. I consider also that I should take account of the fact that
the vehicle had a replacement engine and re-stamping which would have had an
effect on its value.57 In the circumstances, I consider that the starting point in the calculation of damages should be a figure no more than the lower figure in the range of values given by Mr Cuthbert as appropriate in December 2009 when Mr Cassar was advised that the
vehicle was not genuine; namely, $100,000 reduced by 5% to $95,000.
58 Although the plaintiffs claim to have spent almost $55,000 since the car was purchased, it is not clear why this sum should be allowed as damages. The VIP inspection report describes the condition of the vehicle in very favourable terms. Mr Portelli, who carried out works to the vehicle which are unspecified but which apparently cost $21,000, said that when he worked on the vehicle original parts were taken out and were replaced with reproduction parts. It is also likely that these costs included the amount paid to Grand Tourer for work involving the alteration of identification plates. It is difficult to see how this work could have enhanced the value of an “original” GT Falcon in circumstances where the plaintiffs bear the onus of proof of the additional costs they claim for largely unexplained work on the car. These costs cannot be recovered as damages in the absence of proof that the costs were referrable to the breach of the condition relied upon by the plaintiffs.
59 In the circumstances, and taking account the agreed value of the vehicle at present for spare parts of $20,000, damages are assessed at $75,000. The vehicle was purchased by the second plaintiff, Ms Cassar. The contract was with her, and in the circumstances it is appropriate that she should have judgment against the defendant and that the claim by the first plaintiff, Mr Cassar, should be dismissed. Statutory interest will be allowed from the date of the issue of the writ on 26 August 2010.
Proposed Orders
60 Subject to any further submissions by the parties, it is proposed that the following orders be made:
a. judgment for the second plaintiff against the defendant for $75,000 together with interest pursuant to statute from 26 August 2010 of $6,666.78; total judgment $81,666.78; b. the claim by the first plaintiff against the defendant is dismissed; 61 I will hear submissions from the parties as to the form of the orders and on the question of costs.
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Certificate
I certify that these 22 pages are a true copy of the reasons for decision of His Honour Judge
Anderson delivered on 30 June 2011.
Dated: 30 June 2011
Caroline Dawes
Associate to His Honour Judge Anderson
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