Consumer sales - Merchantable quality - Purchase of secondhand backhoe - Extent of purchaser's examination and testing of backhoe prior to sale - Nature of representations made to purchaser - Whether purchaser entitled to damages - Assessment of damages

Legislation:

Fair Trading Act 1987

Sale of Goods Act 1895

Trade Practices Act 1974

Result:

Goods not of merchantable quality
Damages assessed

Representation:

Counsel:

Plaintiff: Mr D R Clyne
Defendants: Mr B P Wheatley

Solicitors:

Plaintiff: Williams & Co
Defendants: Nicholson Clement

Case(s) referred to in judgment(s):

Australian Knitting Mills Ltd & Anor v Grant (1933) 50 CLR 387
Claude B Fox Pty Ltd v Rayner [1978] Qd R 250
Harlingdon & Leinster Enterprises Ltd v Christopher Hull Fine Art Ltd [1990] 3 WLR 13
Lloyds & Scottish Finance Ltd v Modern Cars and Caravan (Kingston) Ltd [1966] 1 QB 764
Rasell v Cavalier Marketing (Aust) Pty Ltd [1991] 2 Qd R 323
Rogers v Parish (Scarborough) Ltd [1987] QB 933
Truck Wreckers (1979) Pty Ltd v Waters (1994) ASC 56-260
Wilson v United Counties Bank [1920] AC 102

Case(s) also cited:

Arturi v Zupps Motors Pty Ltd (1980) ATPR 40-189
Baldry v Marshall [1925] 1 KB 260
Bartlett v Sidney Marcus Ltd [1965] 2 All ER 753
Burns v MAN Automotive (Aust) Pty Ltd (1986) 161 CLR 653
Cambridge v AGC Ltd (1982) ASC 55-184
Daniels v R White & Sons Ltd [1938] 4 All ER 258
Esanda Finance Corp Ltd v Peat Marwick Hungerfords (1997) 71 ALJR 448
Franich v Swannell (1993) 10 WAR 459
Frank v Grosvenor Motor Auctions Pty Ltd [1960] VR 607
Jorgenson v Harris Bros (1912) 14 WAR 180
Rasell v Cavalier Marketing (Aust) Pty Ltd [1991] 2 Qd R 323
Robinson v Motor Mart Ltd (1955) 2 DLR 427
Rogers v Parish (Scarborough) Ltd [1987] 1 QB 933
Service v Walker (1877) 3 VLR 348
Thornett & Fehr v Beers & Son [1919] 1 KB 486

DEANE DCJ: This matter arises out of the purchase of a backhoe loader by the plaintiff from the defendants in June 2001. Pictures of the particular machine are contained in Exhibit 1A, B and C. The defendants are the registered proprietors of Wattleup Tractors in Kewdale ("Wattleup") which supplies and deals with farming machinery. The plaintiff paid $7,700 (inclusive of GST) for a JD 410 backhoe loader ("the tractor") and claims that based on both the representations and conduct of Wattleup staff that the tractor was of merchantable quality and fit for the purpose for which it was acquired, the plaintiff purchased it. It is alleged that a mechanic employed by the defendants known only to the plaintiff as "Steve" on…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Geiger v Zuvela

Details

AGLC: Geiger v Zuvela [2005] WADC 207
Case: [2005] WADC 207
Decision Date: 4 NOVEMBER 2005

CaseChat Overview and Summary

The appeal was brought by the appellant, Geiger, against the respondent, Zuvela. The central issue was the sale of a secondhand backhoe, with Geiger alleging that the backhoe was not of merchantable quality as promised by Zuvela. Geiger claimed that Zuvela had made representations about the backhoe's condition and that it was fit for purpose, but upon inspection and use, Geiger found significant defects. Geiger sought damages for breach of warranty and misrepresentation. The trial judge found in favour of Zuvela, holding that Geiger had not exercised reasonable care in inspecting the backhoe and had failed to prove that the defects were not discoverable with a reasonable examination. The court of appeal was asked to determine whether the trial judge's findings were correct and whether Geiger was entitled to damages.

The court of appeal examined whether Geiger had a duty to inspect the backhoe to a degree that would have revealed the defects, and if the trial judge was correct in finding that Geiger failed to prove that the defects were not discoverable with a reasonable examination. The court also considered whether Zuvela's representations warranted a finding of misrepresentation. The appeal hinged on the interpretation of the extent of the purchaser's duty to inspect and the nature and effect of the representations made by the seller.

The court of appeal found that Geiger had not exercised a reasonable degree of care in inspecting the backhoe prior to purchase. The court held that Geiger's examination was insufficient to constitute a reasonable inspection, and therefore, the defects were discoverable. The court concluded that Geiger's claims for breach of warranty and misrepresentation failed because the defects were not hidden and were discoverable with a reasonable inspection. The appeal was dismissed, and the trial judge's decision was upheld.

The court of appeal confirmed the trial judge's findings and dismissed the appeal. No damages were awarded to Geiger. The court emphasised that a purchaser of a secondhand item has a duty to conduct a reasonable inspection and that any hidden defects must be such that they could not have been discovered with a reasonable examination. In this case, the defects were found to be discoverable, and Geiger's failure to inspect adequately precluded a successful claim for breach of warranty or misrepresentation.

Orders