Eva, Geoffrey John v Preston Motors Pty Ltd

[1977] FCA 36

GENERAL UIVISION

I n the matter of -

MEIG3ER OF

THE BENCH :

ORDER OF

?€E COURT: This Court doth find a d c rder -

1. In proceedings bp sum:ocs u2on the

information o f Geoffrey J d m E x

No. VG 1 2 o f 1977 t h z t on o r ehout

the 4 th day o f August 1975 a t

Campbel1fie:d i n t h e S t a t e oL i r l c t r i a

the defendant Preston I4otors Ptp. L t d .

d id in conzrzvent lon o f S. 53 ( a ) of

the Trade Practlces Act 1374, m 't.radc

o r comwrce 111 connectlo:l 111th t h e

supply of goods f a l s e l y represent That

the goods were of a p a r t i c a l a r stauciaz-d,

i n t h a t i n the course of tradirag In

used cars in connoctlcn with t!l? ccuply

of a used iblden Rlns:wood. mtor car

the sa id cor ,pora t lon fa l s icy reprcse l~ 2 6

t o Noelene Valda Dale:$ t h a t the sszd

motor ca r was o f a p a r t l c u i a r sterick xi,

the defendafit i s convicted. of the o f f e m ?

of so conlravenlng such sec-mor zno. 1s

firred $10,099 a,ld o rdwed t o :~.'ry ti;?

cos t s of the informant as taxed. by l?:+

Regls t ra r ;

2. I n procecdjn.rr: by surmons upon the ir9ormatlo:l 3f Ceo€frey ,Tom E>vk

No. VG 2 L of 19'77 t!lat on o r about t h e

6th day of Pu:;ust 19'/5 a t Cemphellllcla

f n t h e S t a t c of Vlc to rx , t he < i A ' ~ ~ ~ ~ ~ : 2 i C

Preston l~n-5,~~; Pty. L t d . d i d In

ccntraT>ent:cjr, rf 5. "5. ( a ) tl-e 'I'r:!dc

.

Prac t ices Act 1974,	11; t rade o r commerce,
i n connection with	Lhe supply o f goods

f a l s e l y r e p r e s e n t t h a t t h e goods vere of

a par t icu l .a r s tandard , in tha t in the

course of t r ad ing in used ca r s In

connection wlth the supp1:- o f a used

Holden Kingswood motor ca r t he sa id co rpora t ion f a l se ly r ep resen ted to

J o h n Daley t h a t t h e s a d motor c a r was

of a pa r t i cu la r s t anda rd . the defendant

i s convicted o f the offence of so

contravening such scction acd i s f ined

$2,000 and is ordered t o pay the costs of

the informant as taxed by the Registrar;

3. Leave is reserved to the in forment to

seek ancillary re l l e f pu r suan t t o S. 87

of the Trade Practices Act If s o advised.

DATE : 9 t h June 1977.

I N THE FEDZRW COURT	N o s .	VG	12 and 2f+ o f 1577
O F AUSli’ALIA
GENERAL DIVISION

In the mat te r of -

THE TRADE PRKTTCES ACT 1974

Between -

GEOFFREY JOHTI EVA

Informant

And -

PRESTON MOTORS FTY. LTD.

Defendant

Smithers, J.

- 9 t h June l977

DATE :

REASONS FOR JUDGNENT

In these proceedings the defendant 1s charged n t h

two infringements of S . 53 (a ) of khe Trade Pract ices Act .

It i s a l l eged tha t t he de fendmt in t r ade o r commerce

i n connection w i t h the supply of goods, namely a Holden Kmgsxood

sedan then registered number I C Q 430, dld on two occaslons, namely

t h e 5 t h and 6 th August 1975, f a l s e l y r e p r e s e n t t o one Noelene

Valda Daley and one John Daley, t h a t the s a i d c a r was of a

pa r t i cu la r s t anda rd , namely an ex-G.Ci.11. execut ive car .

A t the hear ing the defendant plesded gui l ty to

the informations ar is ing out of these repesentat ions.

!

The dezendant conducts a l a rge busmess se l l l ng

new and second-hand c a r s a t a number of r e t a l l o u t l e t s and a t

the time of the offences employed some 91 salesmen. O n o r

about the 4th August 1975 Mrs. Daley vis i ted the Campbcl l i ie ld

branch of the defendant as p a r t of he r e f fo r t s t o pu rchase

a used Ringswood sedan on behalf of her husband. She was

shown m e such sedan by one Ken David P r i e s t , a salesman

enployed a t the branch but was n o t s a t i s f l e d w i t h It. After

r e f e r r i n g by te lephone wi th ao thes Pres ton Motors o u t l e t ,

Priest then informed Mrs. Daley t h a t t h e r e would be an ex-G.M.?.

execut ive car a r r jv ing a t the yard on the followmg day.

Mrs. Daley returned on the following dzy arid v;r;as

shown the vehic le tha t is described. In these informatlo,ls.

It was then reg is te red number ICQ 430. On two separa te

occasions the Daleys drew a t t e n t i o n t o t h e c a r b e i n g a 1973 mcdci

Yet having a 1975 r e g i s t r a t i o n number and asked f o r an

explanation. On both occasions Priest explained that , 1-I: was

an executive car	and "they have	t h e n p e r s o n a l i s e d	number
p l a t e s , I!.

The car never had been i n any sense a G.M.R. executive

car . It was manufacturcd by G.iJI.II. and s o l d t o Queenslapcl

d e a l e r s i n 1973. I n August 1973 the dea le rs l eased 11; t o

Avis Rent-a-Car Systems Pty. L t d . ( he remaf t e r ca l l ed I1Avlst1)

who used it until 28th November 1974 i n i h e i r c a r r e n t s 1 busint.ss

by h i r i n g it o u t t o members of the publ lc on h i r e and dr lve

yourself terms. Avis returned the LZ- t u t h e d e a l e r s i n

3 .

November 1974. The c a r was s to len and driven t o V i c t o x z

where it was recovered by G.M.H. The r e g i s t r a t i o n was caiicellcd

on 11th December 1974. It was re - reg is te red on 26th

February 1975 and purchased by a t r a d e r known as Auto Trade

Wholesalers who on the 28th February 1975 s o l d it t o t h t i l s

defendant. From then untll purchased by the Daieys it was

used by staff members of the defendant for varlous purposes

and t r a v e l l e d some 3000 Kilometres.

When Mr. Pr ies t requi red the vehic le t o show t o

Mrs. Daley it was with the defendant 's branch a t Preston.

It i s sa id it was sen t from Preston to Campbcllficld without

the normal documentation and that this contr lbuted in come

way t o t h e making of the fa l se representation. It i s t o be

noted, however, that had the normal documentatlon been with t h e

car the only addi t iona l in format ion of s ign i f icance which

M r . P r i e s t would have had would have been t h a t t h e c a r had

been purchased by Preston Motors Pty. L t d . f rom Auto Trcde

Wholesalers. It would not have been revealed that Avls had

cont ro l of t he veh ic l e fo r some 14 months and It would not have

been revealed that G.M.H. ,although the original owners, had had

but a f lee t ing assoc ia t ion wi th it a t t h e end of 1974.

It would seem t h a t when negot ia t ing w i t h M r and Mrs.

Daley, M r . P r i e s t had no information about the car othcr than

could be gained by looking a t it. But Mr. P r i e s t made up f o r

h i s l a c k of knowledge by providing a h i s t o r y of h i s own f o r che

c a r and supporting it by cor robora t lv t narrative proceeding from

h i s own imagination. Not only d i d he lnvent a bclckgrsurld for

the car bu t he def lac ted a q u i t e v l t a l q u e s t i o n f r o m Nrs. I h 1 . e ~

and on the following day r epea ted th i s exe rc i se lr, r e l a t t l on to

Mr. Daley.

The inc ident was qui te d i shones t a d 1 ; ~ s grosslqr

u n f a i r t o M r . and Mrs. Daley a s i t s vict ims. The expl lna t lon

f o r t h e l o s s of t he o r ig ina l r eg i s t r a t ion nmber of t h i s ca r ,

which had neverbeen the car of any executive of C.M.K. d l s r losed

a ru th l e s s and resourceful approach t o the business of

deception. For the l r se rvant ' s misconduct in the mat te r

the defendant is responsible in accordance with S. 84 ( 2 ) cf

the Trade Practices Act which provides that any conddct cn,;.zged

i n on behalf of a body corporate by a servant o f the body

corporate snal l be deemed, for the purposes of the k t , t 3 have

been engaged i n a l s o by t h e body corporate .

When PIES. Daley i n q e c t e d t h e c a r s h e n o t i c e d t h a t

there was a t t a c h e d t o it what i s known a s t h e llL1l form. This

formis requi red by the Victor ian Motor Car Traders Act 1973

t o be a t t a c h e d t o a used car on s a l e by a used car dealer . Its

apparent purpose is t o convey informat ion to poten t ia l purchasers

of t h e i d e n t i t y of the previous owner of the car . In t h i s

case, however, no en t ry was made i n t h e llL'f fcrm o f any infomlatlon

whatever as to any prevlous owner. Posslble dirflcult les

assoc ia ted wi th supply ing the par t icu lars requi red try the

prescr ibed form a re d i scussed i n t he Reasos fo r ,Judgment

i n Eva v. Smthern Mctors (Rox H i l l ) Pty. L t d . Nn . VG 9 of 1977

publI.sheC t h i s d y . But t h e y a f f o r d l i t t l e excuse for nr?t

making some at tempt to supply the required particulars, o r ,

'. 5.

i f t h a t was found d i f f i c u l t , t o c o ~ p l y w i t h t h e c p l r i t of

the enactment, namely t o supply the potent ia l purclxser w l Lh the

i d e n k t y of some previous owner €rom whom he can make

e n q u i r i e s a s t o t h e h i s t o r y of the car .

To do noth jng in the mat te r le f t the sa lesmzn

completely t o h i s own devices In the matter of the h i s t o r y of

the vehicle . But it may well be t h a t i n t h e c a s e of a ca r

with a his tory such as t h a t of t h e car in questior?, merely to

complete an I l L I l form by complying with the technical requircnc-nts

would leave a salesman quite .i.gnorant o f t h e r s a l h i s t o r y of the

car . It i s i n t h i s r e s p e c t t h a t t h e p a r t i c u l e r r e s p o n s i b l l l t y

of management a r i s e s . It requi res no imagination on t h e p a r t

of persons associated with t h i s b u s i n e s s t o r e a l i s e the t

purchasers a re in te res ted i n and l i k e l y t o e m p i r e u i t o t h e

h i s t o r y of a used car of fe red to them. And it would be

apparent to experienced managers t h a t t o l e a v e a salesman

uninformed of t he r e l evan t f ac t s was c a i c u l a t e d t o c a l l his

imaginat ion into play with false representation a s t h e r e s u l t .

On t h i s m a t t e r I r e f e r t o what i s s a i d i n t h e ReasoiXfor Judgmnt

i n Eva v. Southern Motors (Box H i l l ) Fty. Ltd. (supra).

It i s sa id in de fence of the company t h a t it has

a good reputa t ion and without prior ceavictlons and so f a as

i s known i n t h e l a s t f o u r y e a r s a t ~ C S C L f r e e f rom any cxv l l

claims. It i s s a i d t h a t it gives generous warranties, also i l la t

it	has c i rcu lar l sed sa lesmen f rom t ine to t lme but cer tan ly
on	12th May 1975 t o t h e e f f e c t t h a t the authorities admnis t e r ing

G .

the var ious Consumer Acts are severe m t he l r l n - t e rp re t2 t ion

of the law and zealous i n t h e i r p u r s u l t of possiblc offenders

and ?hat it i s cu r ren t p rac t i ce care i n adver t i s ing is esser l t ia l . It 1 s s a i d t h e t

f o r an "operational audltorll and a

I l f inancial audi tor" to carry out spot checks In branches t o

ensure Il that the coinpany's policies are carried out".

I t was also sa id tha t conv ic t ions mlght embarrass t h e

defendan t In r e l a t ion to the r e t en t ion of the conpmyts l icence

t o t r ade as a motor ca r t r ade r .

It was p u t t o t h e C o u r t t h a t t h e company had

suffered from adverse publicity i n r e l a t i o n t o t h c l r p r o s ~ c u t l o n s

b u t i n t h i s r e s p e c t t h e C o u r t was no t r e fe r r ed to any p a r t i c u l a r

i tems or sources of adverse publ ic i ty . But ove ra l l t he re 1s

not de tec tab le a r ea l r ecogn i t ion o f t he necess i ty to a s se r t

t o t h e s a l e s steff i n compelling terms, upon p a n of serious

consequences, the s imple proposi t ion that the t rutn must be

t o l d . I n t h l s c a s e Management f a i l e d t o give the salesman

adequate informat ion as to the h is tory and q u a l i t y o f the goods

but lt is f a r from c l e a r t h a t even i f they had the offence w o x l d

have been avoided.

Perh3ps the required standards o f verhcl-cy a re ngt

a t t a inab le i n l a rge o rgan i sa t ions . If s o , complierlce with

the requirements o f the Trade Practices Act w i l l depend upon

t h e i n s t i t u t i o a of procedures designed in recognition o f hunan

f r a i l t i e s of a proportion of their errL-loyecs.

I

The motor ca r i ndus t ry i s very large; the goods

i n which it dea l s a r e essential to a lmost every fani ly and

business; as s ingle i tems o f purchase they are expensive and

in near ly every purchase there are inevi table uncertaint ies .

To a grea t ex ten t the t rade i s conducted by l a rge rind successfu l

groups with very high turnovers.

In t h e l i g h t of the foregoing and i n o r d e r t o

r e f l e c t t h e	w i l l of	Par l iament , subs tan t ia l pene l t ies	must	be
imposed.

The f a l se r ep resen ta t ions were made on success1vc

days to d l f f e ren t pe r sons but they were made i n r e s p e c t of

only one t ransac t ion of sa le . It mlght herefore have been

an acceptable procedure to impose one convlct ion o€ a penal ty

f ixed i n recogni t ion o f two offences having bee.? c o m i t t e d .

However, it i s my view t h a t on the second day the salesman

having had time t o r e f l e c t on his miscolduct of the previous

day, might have used the occasion t o r e t r a c t . He d i d no t

do s o , bu t went through with the fraud w i t h f u l l d c l i b e r a t l o n .

I cons ide r , t he re fo re , t ha t t he appropr l a t e pena l ty fo r he

inc iden t a s a whole i s $12,000.

Accordingly the penslty lmposed i n r e s p e c t o f the

offence committed on t h e 5 t h A u p s t 1975 'No. VG 12 of 1977)

is $10,000 tm.? that comnitted on thc- Et!: Lugust 1975 ( N O . VG C4

of 19'77) i s $2.~!:9 m each case with