Esanda Finance Corporation Ltd v Plessnig

Esanda Finance Corporation Ltd (Esanda) appealed to the High Court of Australia from a decision of the Full Court of the Supreme Court of South Australia. The dispute concerned whether Esanda, as a finance company, was liable for misleading or deceptive conduct under the *Trade Practices Act 1974* (Cth) (now the *Competition and Consumer Act 2010* (Cth)) in relation to representations made by a motor vehicle dealer to a purchaser, Mr Plessnig. Esanda had financed the purchase of a vehicle, and Mr Plessnig alleged that the dealer had made misrepresentations about the vehicle's condition and suitability for his needs, and that Esanda was vicariously liable for these misrepresentations.

The High Court was required to determine whether Esanda was liable for the conduct of the dealer, which was alleged to be misleading or deceptive under s 52 of the *Trade Practices Act 1974* (Cth). Specifically, the court had to consider the circumstances under which a finance company could be held vicariously liable for the representations made by an independent dealer with whom it had a business relationship, particularly when the finance company was not directly involved in making those representations. The central question was whether the dealer acted as an agent for Esanda in a way that would render Esanda responsible for the dealer's conduct.

The High Court held that Esanda was not liable for the dealer's conduct. The court reasoned that for vicarious liability to arise, the dealer must have been acting as an agent for Esanda, and that agency must have extended to the making of the representations in question. The mere fact that Esanda had a commercial relationship with the dealer, and that the dealer facilitated finance arrangements for its customers through Esanda, was insufficient to establish an agency relationship for the purpose of s 52. The court emphasised that the dealer was an independent entity, and its representations were made in its own capacity, not as an agent of Esanda. The appeal was allowed.