Clover Communications Pty Ltd v Southern Wire Pty Ltd

Supreme Court of South Australia

(Magistrates Appeal: Civil)

CLOVER COMMUNICATIONS PTY LTD v SOUTHERN WIRE PTY LTD

[2022] SASC 86

Judgment of the Honourable Chief Justice Kourakis 

19 August 2022

MAGISTRATES – APPEAL AND REVIEW – SOUTH AUSTRALIA – APPEAL TO SUPREME COURT

TRADE AND COMMERCE – COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – MISLEADING OR DECEPTIVE CONDUCT OR FALSE REPRESENTATIONS

TRADE AND COMMERCE – COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – LIABILITY OF MANUFACTURERS OR IMPORTERS FOR DEFECTIVE GOODS

The appellant is a company that operates a sheep grazing property on Kangaroo Island. In January 2009 and May 2010, the appellant purchased a total of 54, 200 metre rolls of fencing wire through an agricultural agent. The respondent is the manufacturer of the fencing wire.

At trial, the appellant alleged that it was induced to purchase the fencing wire by representations made by a sales representative of the respondent. The alleged representations were that the fencing wire was high quality fencing wire, that the fencing wire recommended was the respondent’s best corrosion resistant fencing wire and would last 50 years and that it was appropriate to meet the respondent’s requirements.

The appellant installed all the fencing wire on the Kangaroo Island property by the end of 2010. By December 2015, the appellant found the fencing wire to be corroding and asserts that it continues to corrode.

The Magistrate dismissed the appellant’s claim, finding that the appellant did not establish, on the balance of probabilities, the factual matters necessary to support its allegations. The appellant appeals that decision on the grounds that the Magistrate erred in:

-     not finding that the representations were false;

-     finding that the fencing wire was of merchantable quality;

-     finding that the appellant’s managing director, Mr Atkinson, could not give sufficient evidence to exclude the possibility of chemical overspray;

-     finding that the fencing wire was still functioning as a serviceable fence;

-     given the above grounds, not finding that the appellant was entitled to damages in the sum of $100,000 plus interest and costs.

Held, per Kourakis CJ, allowing the appeal:

1.   Representations were made to the appellant about the fencing wire and those representations were false.

2.   The fencing wire was not of merchantable quality.

3.   The evidence of Mr Atkinson was credible and there was no evidence put contrary to the claim that chemical spraying on the farm was consistent with common farming practices in the area.

4.   The fencing wire is no longer functioning as a serviceable fence.

5.   The appellant is entitled to $78,000 in damages with the questions of interest and costs reserved.

Trade Practices Act 1979 (SA) ss 52, 53; Manufacturers Warranties Act 1974 (SA) ss 4, 51(4); Misrepresentation Act 1972 (SA) s 7; , referred to.

Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31, applied.

CLOVER COMMUNICATIONS PTY LTD v SOUTHERN WIRE PTY LTD
[2022] SASC 86

Magistrates Appeal: Civil

1. KOURAKIS CJ:     The appellant Clover Communications…