Griffiths v LMM Holdings Pty Ltd
[2017] FCA 1212
•11 October 2017
FEDERAL COURT OF AUSTRALIA
Griffiths v LMM Holdings Pty Ltd [2017] FCA 1212
File number(s): QUD 747 of 2016 Judge(s): GREENWOOD J Date of judgment: 11 October 2017 Catchwords: CONTRACTS – consideration of the question of whether an agreement for the purchase of a motor vehicle included a term that the vehicle be delivered “by the end of August 2015” – consideration of whether a representation as to the time for delivery was relied upon by the purchaser in purchasing the vehicle – consideration of whether an election on the part of the buyer to terminate the contract constituted a repudiation of the purchase contract – consideration of whether the purchaser discharged the burden of proof in relation to the reliance
PRACTICE AND PROCEDURE - consideration of the principles to be applied by an appeal court in undertaking a re‑hearing – consideration of the principles to be applied in determining challenges to findings of fact – consideration of the observations of the High Court in Robinson Helicopter Company Inc v McDermott (2016) 90 ALJR 679; 331 ALR 550 and especially the observations at [43]
Cases cited: Allesch v Maunz (2000) 203 CLR 172
Coulton v Holcombe (1986) 162 CLR 1
CSR Limited v Della Maddalena (2006) 224 ALR 1
Gould v Vaggelas (1984) 157 CLR 215
Lacey v Attorney-General (Qld) (2011) 242 CLR 573
Meehan v Jones (1982) 149 CLR 571
Robinson Helicopter Company Inc v McDermott (2016) 90 ALJR 679; 331 ALR 550
University of Wollongong v. Metwally [No. 2] (1985) 59 ALJR 481
Warren v Coombes (1979) 142 CLR 531
Whittaker v Child Support Registrar [2010] FCAFC 112
Date of hearing: 24 February 2017 Date of last submissions: 24 February 2017 Registry: Queensland Division: General Division National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Category: Catchwords Number of paragraphs: 99 Counsel for the Appellant: R J Oliver Solicitor for the Appellant: Mark Treherne & Associates Counsel for the Respondent: C G C Curtis Solicitor for the Respondent: Results Legal ORDERS
QUD 747 of 2016 BETWEEN: LIZA ANN GRIFFITHS
Appellant
AND: LMM HOLDINGS PTY LTD AS TRUSTEE FOR BRISBANE BMW TRUST ACN 448 408 349
Respondent
JUDGE:
GREENWOOD J
DATE OF ORDER:
11 OCTOBER 2017
THE COURT ORDERS THAT:
1.The appeal is dismissed.
2.The costs of and incidental to the appeal are reserved for later determination.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
GREENWOOD J:
Background
This proceeding concerns an appeal from the judgment and orders of the Federal Circuit Court of Australia (the “Federal Circuit Court”) in Griffiths v LMM Holdings Pty Ltd as the Trustee for the Brisbane BMW Unit Trust [2016] FCCA 2322 (“the primary judgment”). The appellant in this proceeding, Dr Liza Ann Griffiths (“Dr Griffiths”), who was the unsuccessful applicant in the principal proceeding, brings the appeal pursuant to s 24(1)(d) of the Federal Court of Australia Act 1976 (Cth).
The relevant background facts are these.
On 6 June 2015, Dr Griffiths, her husband, Mr Graeme William Griffiths (“Mr Griffiths”), and their two young children, attended the BMW dealership located at 800 Ann Street, Fortitude Valley, Brisbane. The couple spent several hours at the dealership and, while there, they each separately test drove a vehicle not dissimilar to the one Dr Griffiths was interested in buying. Later that day, before leaving the dealership, Dr Griffiths purchased a “BMW 525i Touring” model (the “BMW”) from the respondent.
The purchase price was $142,069.01. The vehicle had to be built and delivered from Germany. The sale contract, “Contract for the Purchase of a New Vehicle”, was two pages in length and provided for the purchase of the car on finance. On the front page of the contract there was a space for the inclusion of an estimated delivery date, which was left blank. Dr Griffiths paid a $2,000 deposit prior to the Griffiths leaving the dealership.
Earlier in the year, Dr Griffiths had purchased a Mercedes Benz (from an entirely different dealer), although it suffered from “persistent mechanical breakdowns” and so arrangements had been made for a Mercedes Benz loan vehicle to be made available. At the time of entering into the contract with the respondent, Dr Griffiths had possession and use of the loan vehicle, until such time as she was to receive a replacement Mercedes Benz for the one with all the problems. Dr Griffiths was to take delivery of the replacement Mercedes Benz and return the Mercedes Benz loan vehicle by the end of August 2015. Upon receipt of the replacement Mercedes Benz, Dr Griffiths intended to sell it, without ever driving it, so as to “preserve its condition and improve the price for which they might sell it”. It was in this context that Dr Griffiths and her family attended the BMW dealership on 6 June 2015. Dr Griffiths anticipated that, as things then stood, she would need a vehicle by the end of August 2015.
While at the respondent’s dealership on 6 June 2015, Dr Griffiths discussed a number of matters with a sales representative employed by the respondent, Mr Gregory Martin Johnson (“Mr Johnson”), including, ultimately, the delivery date for the BMW. It is on this particular matter that there was a major point of departure between the evidence of Dr and Mr Griffiths, on the one hand, and of Mr Johnson, on the other, both in the affidavit evidence and also the oral evidence in the principal proceeding.
Subsequent to the contract being entered into, a series of conversations also took place, as one would expect, between various employees of the respondent and either Dr Griffiths or Mr Griffiths, concerning aspects of the transaction. Correspondence was also exchanged at various stages. The content of some of these exchanges will be discussed later in these reasons.
For present purposes, it should be noted that Dr Griffiths, on 8 July 2015, purported to terminate the contract of purchase by sending an email to Mr Andrew Robson (“Mr Robson”), an employee of the respondent. Dr Griffiths purported to terminate the contract as, contrary to what she alleged had been represented to her on 6 June 2015 by Mr Johnson, namely that the vehicle would be delivered to her by the end of August 2015 (“the delivery representation”), it had since become apparent that the vehicle would not be delivered by the end of August 2015. Mr Griffiths had been told of this during a telephone conversation he had on 19 June 2015 with Mr Mark Korunich (“Mr Korunich”), who held the position of the respondent’s New Car Sales Manager. Mr Korunich told Mr Griffiths that the respondent would make a loan vehicle available to Dr Griffiths pending delivery of the BMW.
In response to Dr Griffiths’ email of 8 July 2015 the respondent, on 10 July 2015, asserted in a letter that there was still a purchase contract on foot with attendant obligations flowing from it, and that the respondent would pursue a claim for damages should Dr Griffiths not discharge those obligations. The respondent also reiterated its offer to make available a loan vehicle pending the delivery of the purchased vehicle.
Thus, put simply, the dispute emerged in circumstances where Dr Griffiths alleged: first, that the delivery representation had been made to her by Mr Johnson; second, that in reliance on the delivery representation and/or induced by the delivery representation, she entered into the contract; and, third, once it became apparent that the vehicle would not be delivered by the end of August 2015 (an alleged anticipatory breach of the contract by the respondent), Dr Griffiths accepted the anticipatory breach and purported to treat herself as discharged from further performance of any obligations arising under the contract, and treat the contract as terminated.
The principal proceeding
Before Judge Jarrett of the Federal Circuit Court, Dr Griffiths contended that due to the failure of the dealership to honour the delivery representation, she was entitled to cancel the purchase contract. Dr Griffiths sought a return of the deposit, interest and costs as well as a declaration that the respondent had engaged in misleading and deceptive conduct under s 18 of the Australian Consumer Law (the “ACL”) (Schedule 2 of the Competition and Consumer Act 2010 (Cth)).
The respondent cross‑claimed for, among other things, the sum of $14,206.90, being 10 per cent of the purchase price, claiming an entitlement to do so pursuant to Condition 7 of the purchase contract.
In the result, the primary judge held that Dr Griffiths’ purported termination of the purchase contract on 8 July 2015 was ineffective to bring the purchase contract to an end and held that the respondent, in a letter of 3 September 2015, effectively terminated the purchase contract by accepting Dr Griffiths’ repudiation.
Judge Jarrett therefore dismissed the application of 9 September 2015 and found in favour of the respondent in relation to its cross‑claim. The applicant was ordered to compensate the respondent for the loss it sustained by virtue of Dr Griffiths’ refusal to complete the purchase contract (plus interest), with the damages assessed at $14,204 (reduced by $2,000 being the amount of the deposit already paid by Dr Griffiths).
The primary judgment
For the sake of completeness, these are the matters about which the primary judge was satisfied (primary judgment at [4]):
(a)Dr Griffiths agreed to purchase a BMW motor vehicle from the respondent;
(b)the purchase contract is not uncertain, nor is any term of it unfair for the purposes of the ACL;
(c)before the contract of purchase was formed, Brisbane BMW’s salesman did make a representation to Dr Griffiths and her husband that the vehicle she wished to purchase would be delivered by the end of August 2015;
(d)the representation did not become a term of the purchase contract;
(e)the representation does not give rise to any operable estoppel against Brisbane BMW;
(f)the representation was a prediction or a representation as to a future matter;
(g)the salesman did not have reasonable grounds for making the representation;
(h)by the making of the representation, Brisbane BMW, by its servant or agent, engaged in misleading and deceptive conduct contrary to s 18 of the ACL;
(i)Dr Griffiths did not rely upon the representation when she entered into the purchase contract;
(j)Dr Griffiths’ purported termination of the purchase contract on 8 July 2015 was ineffective to bring the purchase contract to an end; and
(k)Brisbane BMW effectively terminated the purchase contract by letter dated 3 September 2015 when it accepted Dr Griffiths’ repudiation of the purchase contract.
The current proceeding
Dr Griffiths contends in her grounds of appeal that, put simply: the learned trial judge erred in not finding that she relied on the delivery representation; and that his Honour erred in finding that the purchase contract for the vehicle was not void for uncertainty (due to contended deficiencies with the “subject to finance clause”).
In the course of the hearing before this Court, counsel for the appellant, Mr Richard Oliver, observed that there are “… only two points in this appeal” (T, p 2, ln 43).
Given that the appellant’s pleaded case challenges various findings of fact made by the primary judge, it is necessary to set out several passages from the primary judgment which relate to those grounds which are the subject of this appeal. I will separately deal with the findings of fact made by the primary judge in relation to the “reliance point” and the “uncertainty point”.
Findings of fact by the primary judge: reliance point
As an overall observation, the primary judge was critical of the affidavit evidence put before the Court by each party.
His Honour explained that there was “considerable difficulty” with the affidavit evidence of Mr Johnson and that “[t]here was no attempt by Mr Johnson to set out the conversations that he alleges were had by him with the Griffiths”: primary judgment at [14]. His Honour further remarked that whilst the “affidavit speaks of his usual practice … there is no direct evidence from him about what it was that he in fact said to the Griffiths on the relevant occasion”: primary judgment at [14]. The primary judge went on to say that although Mr Johnson “denies having made assurances about a delivery time, his evidence does not set out what he actually said to them”: primary judgment at [14].
The primary judge also referred to the Griffiths’ evidence as being “not much better” and observed, more generally, that “[t]here was no attempt by either party to put before the [C]ourt, in proper form, the conversations that they say took place between the Griffiths and Mr Johnson”: primary judgment at [15].
In any event, Mr Johnson accepted in cross-examination that the matters set out at [5]‑[6] of these reasons were explained to him on 6 June 2015 (primary judgment at [11]) and, so, the primary judge, having regard to that cross-examination, took the view that it was:
… clear from that evidence that Mr Johnson did indeed represent to Dr Griffiths that the vehicle she wished to purchase would be delivered to her by the end of August 2015.
[emphasis added]
His Honour described the representation as “unequivocal” and noted that Mr Johnson’s evidence was that he departed from his “usual” or “standard” practice, namely “of not promising any specific date for when the car will be delivered by” and saying that, for a factory ordered vehicle, it “generally takes approximately a month to order, a month to build and [a] month to get here, on average”: primary judgment at [12] and [17].
The cross-examination of Mr Johnson by Mr Fisher, counsel for the applicant in the Federal Circuit Court proceeding, referred to at [22] of these reasons, was as follows (primary judgment at [16]):
MR FISHER: Now, in terms of the needs of Dr Griffiths you were aware, weren’t you, that they had problems with a Mercedes Benz? --- Yes.
And that they were getting rid of this car at the end of August? --- Yes.
[Alright]. And you accept, then, that Dr Griffiths needed a car by the end of – a car from your dealership by the end of August? --- Yes.
And you accept that she actually said to you, “We need a car by the end of August”? --- Yes.
[Alright]. And so – and do you accept that you then said in response to that statement from Dr Griffiths you said something like this, “If you place an order today”, meaning 6 June 2015, “there’s a two to three month build time and the car will be available at the end of August”? --- No.
I’m suggesting you did say that and, in fact, given that Dr Griffiths had said they needed a car by the end of August and that you also wanted to clinch this sale you did, in fact, say that the car would be available at the end of August. That’s correct, isn’t it? --- You’re trying to allude that I’m guaranteeing a car by that time which I did not.
HIS HONOUR: Can you answer the question now? Don’t worry about what counsel is trying to allude. Answer the question, sir? --- Then, yes.
…
MR FISHER: Thank you, your Honour. In fact, Mr [Johnson], because you were keen to please Dr Griffith[s] as a repeat customer of Brisbane BMW you, in fact, said that if the order was placed today, 6 June, there’s a two to three month build time and the car will be available at the end of August 2015. That’s right, isn’t it? --- I never promised an exact date.
Okay. You just agreed with me a few moments ago that the car – you said you agreed with me when I asked you that the car would be available at the end of August. You just agreed with me, didn’t you? --- Yes.
[Alright]. So if I was a fly on the wall looking at your conversation on 6 [June], do you accept that the Griffiths had said to you we need a car by the end of August because we’re getting rid of our troublesome Mercedes Benz and you, wanting to please because you’re a good salesman, you say to them we can have it – there’s a two to three month build and we can have a car for you at the end of August. That’s what you’ve just agreed to, isn’t it? --- Yes.
So as things then stood – not what you think happened later – as things then stood the Griffiths – you said the Griffiths could have a car by the end of August 2015, didn’t you? Look at me, don’t look at your counsel, or look at his Honour? --- Yes.
As a consequence of Mr Johnson’s own evidence of the time it takes for a new vehicle to be delivered (about three to four months) and his usual or standard practice, Judge Jarrett accepted that Mr Johnson, on behalf of the respondent, had not only made the delivery representation, but made it in circumstances where he had no reasonable basis for it, and thus (subject to what follows) the conduct constituted misleading and deceptive conduct for the purposes of s 18 of the ACL.
His Honour, however, was not prepared to accept that the appellant had relied on the representation when she entered into the contract, instead finding that (primary judgment at [20]):
Dr Griffiths gave no evidence at all that she relied upon the delivery representation … when she entered into the purchase contract … [nor] does she suggest that she was induced to enter into the contract by his representation about delivery.
[emphasis added]
In support of this finding, the primary judge referred to Dr Griffiths’ affidavit of 22 December 2015, Mr Johnson’s affidavit of 28 January 2016, and Mr Griffiths’ affidavit in reply of 15 February 2016.
First, as to Dr Griffiths’ affidavit, the primary judge refers to [10]–[13] in which Dr Griffiths deposed to the following matters:
10.We discussed the colour we wanted, the interior, and the options which were available, and he pulled out the swabs for the seat upholstery, and we decided on our selections. The technical options were specified by Graeme. We informed him that we required the vehicle at the end of August, 2015. We informed Johnson that we wanted the BMW at that time, because the new Mercedes was to arrive at the end of August, 2015 and we wanted to sell it straight away.
11.For me, it was the size of the car, visibility and seating position which were the important things.
12.I had previously test driven a Mercedes and I had difficulties with vision because of torso height, my vision was obscured by the B pillar for shoulder checks.
13. From a vision perspective, the BMW did not have the same fault.
Second, the primary judge refers to [21] of Mr Johnson’s affidavit:
21.I recall that Mr Griffiths then referred to the fact that he and Dr Griffiths had already ordered a replacement Mercedes Benz car, and they expected it would be delivered at the end of August, and they were using a loan car from Mercedes Benz until then. I replied that even when that happens, they will still have to spend some time to sell the Mercedes Benz car. Mr Griffiths asked what would happen if they sold the Mercedes Benz straight away, and whether they would be able to obtain a loan vehicle. Although I could not promise that Brisbane BMW would do so (as this required approval from a manager), I said words to the effect that, “We would not want someone who had just bought a $150,000 car left without a car”, referring to the fact that I believed that Brisbane BMW would be willing to loan her a car (a “loan car”) if this happened. Although providing a “loan car” always required approval from a manager, in my experience this would usually have been approved for a customer like Dr Griffiths who was a repeat customer, was coming over from a competitor (Mercedes Benz) and was a member of a “corporate program” (that is, through her AMA membership), which were factors that usually meant, in my experience, a “loan car” would be provided for some time if it had been requested.
[original emphasis]
Third, as to Mr Griffiths’ affidavit in reply (to Mr Johnson’s evidence in chief), the primary judge notes these matters at [10]‑[11]:
10.In reply to paragraph 21, the conversation was generally like that reported by Mr Johnson. He did not say that he could not promise to provide a loan car. My recollection is that he said “we will look after you”.
11.In reply to paragraph 22 [of Mr Johnson’s affidavit], the statements made by Mr Johnson are untrue. We informed him that we wanted the car by the end of August, 2015 and the statements reassured us that this could be achieved. From memory, I may have asked the question; “what happens if the car is not provided by the end of August, 2015?” and to that question Mr Johnson said “we will look after you” [from] which I inferred that a loan car would be arranged.
[original emphasis]
Upon reviewing these three affidavits and in light of those particular paragraphs mentioned above at [28]‑[30] of these reasons, the primary judge made the following observations:
[23]Dr Griffiths did not take any issue with Mr Johnson’s evidence to which I have just referred. Mr Johnson’s unchallenged evidence suggests that Mr Griffiths contemplated the possibility that the new BMW vehicle might not be delivered by the end of August 2015. He gave evidence in cross-examination that Mr Johnson told him that there were many variables that might impact on the date upon which the vehicle might be delivered but that it usually took a month for the vehicle to be ordered, a month for it to be built and a month for it to be delivered. He wanted to know from Mr Johnson what would happen in the event that the vehicle was not delivered by the end of August. Mr Johnson provided an explanation about what would happen. There is no evidence to suggest that either Dr Griffiths or Mr Griffiths found the explanation unacceptable. Dr Griffiths subsequently entered into the contract.
[24]That evidence satisfies me that the representation by Mr Johnson about the delivery time for the vehicle was not important or essential to Dr Griffiths’ decision to purchase the vehicle. It plainly had some significance to her, but that satisfactory alternative arrangements might be put in place if the vehicle was not delivered by the end of August 2015 demonstrates that delivery by that time was not considered essential, or even important, by her.
[25]The purchase contract was constituted by a printed form entitled ‘Contract for the Purchase of a New Vehicle’. On its face it had various areas that could be completed when the details that needed to be inserted had been ascertained. The reverse consisted of a series of printed terms and conditions. The reverse was entitled ‘CONDITIONS’. The front of the document had areas that could be completed in handwriting and provision for the parties to sign the document. The reverse had only a space for the purchaser’s initials. Dr Griffiths signed the front and reverse pages of the purchase contract.
[26]The front of the purchase contract had a space for the inclusion of an estimated delivery date. It was left blank. The absence of an estimated delivery date, given the conversations about when the vehicle might be delivered and what would happen if the vehicle was not delivered by the end of August, 2015 tends to suggest that by the time the written form was signed and the contract was made, a precise time for delivery was no longer important.
[emphasis added]
The primary judge also took into consideration a subsequent telephone conversation between Mr Johnson and Mr Griffiths, on 11 June 2015, during which the two discussed the delivery of the vehicle. The primary judge was of the opinion that that discussion, which had been recorded by Mr Griffiths (a transcript was in evidence) (primary judgment at [41]):
… confirm[ed] … that Dr Griffiths did not rely upon the representation made by Mr Johnson about delivery of the vehicle by the end of August [2015] … [and] is consistent with an understanding that [Brisbane BMW] would probably have the vehicle available by the end of August but that it might not be able to be delivered then.
[emphasis added]
Regard was also had to a further telephone conversation, again between Mr Johnson and Mr Griffiths (the former had called the latter) during which Mr Griffiths was informed that the vehicle would “‘probably’ be delivered in October 2015”: primary judgment at [43]. Mr Griffiths gave evidence that “he asked [Mr Johnson] about the loan car that Mr Johnson had offered during their meeting in the showroom, but that Mr Johnson told him that because the ‘build time’ was so long, a loan car could not be made available”: primary judgment at [43]. In contrast, Mr Johnson’s evidence was that he offered to make a loan car available: primary judgment at [43].
The evidence of Mr Korunich was that on 19 June 2015 when Mr Griffiths said that he wanted to cancel the purchase contract, Mr Korunich “told Mr Griffiths that he could have a loan vehicle until his purchased vehicle was delivered”: primary judgment at [44]. Mr Korunich gave evidence that “Mr Griffiths sounded surprised at the suggestion and that he undertook to speak with Dr Griffiths about [it]”: primary judgment at [44]. The primary judge at [44] considered and accepted the evidence of Mr Korunich.
It was accepted because “[a]lthough Mr Griffiths made and filed an affidavit in reply to the affidavits made by the witness for [the respondent], [Mr Griffiths] took no issue with Mr Korunich’s evidence”: primary judgment at [44].
Mr Korunich did not hear from Mr Griffiths again and the next communication between the respondent and either of the Griffiths was on 8 July 2015 (discussed at [8] of these reasons).
On appeal: the reliance point
The appellant, in her written submissions, frames the issue on appeal, at least insofar as it relates to the reliance point, as:
… whether the [C]ourt’s finding of fact that the appellant did not rely on the representation was open on the evidence or alternatively whether it was against the weight of the evidence.
[emphasis added]
The appellant further submits that “the only reasonable conclusion the [C]ourt could reach is that the appellant did rely on the delivery representation that the vehicle would be delivered by the end of August [2015]”.
The appellant also asserts that “[t]he finding of fact about reliance was wrong and contrary to the evidence adduced at the trial”. The appellant then sets out various paragraphs of Dr Griffiths’ and Mr Griffiths’ affidavits, which are said by the appellant to support the aforementioned assertions.
In essence the appellant maintains that the primary judge “gave undue weight to” and/or “placed undue emphasis on”:
-the evidence about the loan car and Mr Johnson’s statement concerning the availability of same;
-Dr Griffiths’ apparent satisfaction with Johnson’s statement (although she was not questioned about it);
-the fact no delivery date was inserted on the face of the contract; and
-Dr Griffiths’ statement that she felt assured that the vehicle would arrive by early September 2015.
The appellant also says that:
… the Griffiths were not directly challenged in cross[-]examination, nor was it submitted by the respondent at the conclusion of the trial, that they did not rely on the delivery representation when entering into the contract. Although the question of reliance was not pleaded in the statement of claim, and challenged in the defence, it was not made an issue by the respondent at the hearing [before the Federal Circuit Court]. Pointedly, the respondent did not submit, either in the written submission or in the oral address that the [C]ourt should make a finding that there was no reliance on the delivery representation, if it was found to have been made.
The respondent, for its part, in its written submissions, asserts that such a “general challenge” to a finding of fact is “not appropriate in a case determined by a judge where detailed reasons for findings have been given”.
The respondent also submits that “[s]imply referring to evidence in favour of the appellant and asserting its weight does not establish error”.
Further, the respondent argues that the appellant, in her grounds of appeal, has not “rais[ed] any procedural issue or suggest[ed] any unfairness in the conduct of the trial” and that, moreover, the “references in the appellant’s submissions to the parties’ submissions, made following the evidence, and what was put in cross-examination are not relevant to any ground of appeal”.
Was reliance in issue or not in the principal proceeding in the Federal Circuit Court?
Was reliance put in issue before the primary judge?
On appeal, the Court put the above question to counsel for the appellant. It was the subject of some discussion.
The first exchange on this matter occurred between counsel for the appellant and the Court (T, p 6, lns 18‑46; p 7, lns 1‑7):
MR OLIVER: In fact, I make the point, I think, in the submissions – in the outline and I will make the point again now, reliance was simply never an issue in the trial. Now, his Honour made a finding that there was no direct evidence by Dr Griffiths.
HIS HONOUR: Yes, he says that.
MR OLIVER: Now, that’s a difficult one in the sense that, yes, we accept that she did not say, “Well, I relied on that representation before I entered into the contract.” The difficulty ‑ ‑ ‑
HIS HONOUR: And then he goes on to say then that he – notwithstanding that lack of direct evidence, it might be that one can find as a fact reliance based on inferences that properly arise from other proven facts.
MR OLIVER: Yes, that’s certainly the case. But the other feature of that is, your Honour, how do you actually get that evidence in unless it was part of the conversations with Johnson?
HIS HONOUR: And unless it was part of the controversy.
MR OLIVER: Unless it was part of the controversy.
HIS HONOUR: And you say it wasn’t pleaded. Was it the subject of submissions before the primary judge?
MR OLIVER: Look, I can’t see it pointedly. I’ve looked at it. There were certainly submissions about the loan car, but that was in the context, as I read it, your Honour, that – you will see part of the course of action was to make the representation a term of the contract.
HIS HONOUR: Yes. Sure.
MR OLIVER: And as I read it – my friend can correct me, but as I read that, it was in that context that the loan car was used to urge his Honour not to make a finding that the representation was a term of the contract, you know, and it was – obviously that – if it was, it would have been breached, but that’s the only place where I could find that the – that that – it was raised. …
[emphasis added]
Sometime later during the course of the appeal, the Court posed similar questions to counsel for the respondent (T, p 19, lns 29‑46; p 20, ln 1; p 20, ln 25):
HIS HONOUR: … But [was it] a question in controversy before the primary judge that reliance had occurred? Did you contest actively the question of reliance?
MR CURTIS: I can’t point to particular positive submissions independently on that fact.
HIS HONOUR: Well, was ‑ ‑ ‑
MR CURTIS: It was in issue on the pleadings.
HIS HONOUR: Right.
MR CURTIS: It was required to be determined. It hadn’t been admitted.
HIS HONOUR: Well, it was an issue on the pleadings in the sense that you denied ‑ ‑ ‑
MR CURTIS: It is.
HIS HONOUR: But was it actively in controversy – the question?
…
HIS HONOUR: Yes. But did you put to him in cross-examination that in entering into the contract on 6 June [2015] to acquire the car he did not rely upon or she did not rely upon or neither [of] them relied upon a representation in a particular term.
MR CURTIS: I don’t think it can be that squarely. …
[emphasis added]
Mr Curtis then raised with the Court what he called “a significant point” for the respondent, namely “the fact that there had been a discussion about the loan car was conceded in reply affidavits” (T, p 20, lns 39‑40).
The following exchange then took place (T, p 20, lns 44‑47; p 21, lns 1‑15; p 22, lns 24‑46; p 23, lns 1‑11):
MR CURTIS: Now, there’s no necessity for me to cross-examine a witness about evidence that I accept and I’m going to ask the judge to act on.
HIS HONOUR: Yes. Sure. Absolutely.
MR CURTIS: And of course, both Mr Griffiths and Dr Griffiths deposed that they had read the affidavits ‑ ‑ ‑
HIS HONOUR: Yes.
MR CURTIS: ‑ ‑ ‑ and took the opportunity to respond.
HIS HONOUR: Yes.
MR CURTIS: Now, there’s no ground in this appeal on fairness but in any event they read the affidavits. They saw that there was discussion being put forward by Brisbane BMW about a loan car and an explanation about the variability involved. They responded in the way that they wished.
HIS HONOUR: That’s true.
…
MR CURTIS: We accepted what was in their reply affidavits. No one has asked your Honour – no one asked the learned trial judge not to accept that evidence.
HIS HONOUR: Yes.
MR CURTIS: His Honour was entitled to, when making a finding on a fact in issue which had not been admitted or conceded ‑ ‑ ‑
HIS HONOUR: Yes.
MR CURTIS: ‑ ‑ ‑ take the relevant probative evidence into account. Can I say this, your Honour, as well. It was – and I will do it in a way that does not sound in any way to the extent I can defensive but it’s one-day trial with a large number of issues over a $2000 claim going one way, a $12,000 claim going the other way.
HIS HONOUR: Yes. I understand. I understand.
MR CURTIS: If I had – if anyone had suggested that the case was being run other than on the pleadings someone would have had to sat there in some fashion and identified every fact that was in issue. It wasn’t as though the judge said I want a list of all the points in issue.
HIS HONOUR: Yes.
MR CURTIS: The issues seriously in dispute and your contentions on each issue. No one left the pleaded case.
HIS HONOUR: Yes.
MR CURTIS: And the addresses made in response showed that counsel for the appellant at trial realised that there was a need to point to some evidence. I don’t think either party really thought that that would be the critical point but his Honour still had to determine the facts in issue.
HIS HONOUR: Sure, sure. Yes. Sure.
[emphasis added]
Having regard to both parties’ written and oral submissions, and, having had the benefit of reading a transcript of the Federal Circuit Court proceeding, I am satisfied that, in all the circumstances, reliance can be regarded as having been a live issue, albeit one which was, perhaps somewhat unsurprisingly, not put as “squarely” to witnesses as it otherwise ought to have been. Nevertheless, it was squarely part of the controversy and in issue on the pleadings.
Whilst I can certainly appreciate that this litigation is undoubtedly and understandably important to the Griffiths and, by necessary extension, the respondent, it is nevertheless a dispute over a relatively minor sum. Despite neither counsel at first instance putting reliance (or, for that matter, inducement) “squarely” to witnesses, the question was in issue. The appellant had the burden of providing reliance. The evidence concerning the loan car was relevant to the question of whether the probative burden had been discharged. There was evidence before Judge Jarrett on which his Honour could, and did, form a view and reached the findings of fact.
An appeal by way of rehearing requires that error, in the sense of either “legal, factual or discretionary error”, by the lower court has been demonstrated (Allesch v Maunz (2000) 203 CLR 172 at [23]; Lacey v Attorney-General (Qld) (2011) 242 CLR 573 at [57]). Factual error, which is the relevant error alleged in this proceeding, will be demonstrated if the appellate court can be satisfied that a finding of fact, whether based on credit or by the drawing of an ultimate inference from found or uncontested facts, is wrong.
The Court is obliged to conduct a “real rehearing” and “a thorough examination of the record”. As Kirby J observed in CSR Limited v Della Maddalena (2006) 224 ALR 1 at [16]:
… [The appellate court] is not confined to reconsideration of the record in order to correct errors of law, although that will certainly be encompassed in such an appeal. It is required to consider suggested errors of fact-finding. Experience teaches that many errors of this kind arise at first instance, more perhaps than errors of law. Having conducted a rehearing as so described, the appellate court is obliged to ‘give the judgment which in its opinion ought to have been given in the first instance’. This involves, where, as here, there is no jury, conducting a thorough review of the primary judge's reasons and engaging in the tasks of ‘weighing conflicting evidence and drawing … inferences and conclusions’.
[citations omitted]
In Whittaker v Child Support Registrar [2010] FCAFC 112 at [2], Keane CJ (as his Honour then was), Moore and Perram JJ said:
On the appeal to this Court, the appellants’ submissions on issues of fact proceed, in large part, on the assumption that the issues between the parties remain at large as if they had not been determined by the findings of the learned trial judge. It is not open to this Court to determine issues of fact, as if the findings of the learned trial judge had not been made. While this appeal is an appeal by way of rehearing, the Court’s function is to correct errors in the decision below.
[emphasis added]
More recently the High Court, in Robinson Helicopter Company Inc v McDermott (2016) 90 ALJR 679; 331 ALR 550, restated the role of appellate courts in considering challenges to fact‑finding. Their Honours, French CJ, Bell, Keane, Nettle and Gordon JJ, said this at [43]:
… A court of appeal conducting an appeal by way of rehearing is bound to conduct a “real review” of the evidence given at first instance and of the judge’s reason for judgment to determine whether the judge has erred in fact or law. If the court of appeal concludes that the judge has erred in fact, it is required to make its own findings of fact and to formulate its own reasoning based on those findings. But a court of appeal should not interfere with a judge’s findings of fact unless they are demonstrated to be wrong by “incontrovertible facts or testimony” or they are “glaringly improbable” or “contrary to compelling inferences”.
[citations omitted; emphasis added]
These observations of the High Court in 2016 are entirely consistent with earlier authority.
In Warren v Coombes (1979) 142 CLR 531, Gibbs ACJ, Jacobs and Murphy JJ; Stephen and Aickin JJ dissenting, set out the relevant principles, which were those discussed by Barwick CJ and Windeyer J in Da Costa v Cockburn Salvage & Trading Pty Ltd (1970) 124 CLR 192 (and subsequently in Edwards v Noble (1971) 125 CLR 296). The relevant passages are as follows:
The question is not whether the appellate court can substitute its view of the facts which, of course, it is empowered to do: but whether it should do so. In any appeal against a finding of fact, whether or not by way of rehearing, however much the appellate court may be in an equal position with the trial judge as to the drawing of the inferences, in my opinion, the appellate court ought not to reverse the finding of fact unless it is convinced that it is wrong. If that finding is a view reasonably open on the evidence, it is not enough in my opinion to warrant its reversal that the appellate court would not have been prepared on that evidence to make the same finding”.
…
But, in any case, the appellate court in my opinion is not bound to reverse the primary judge’s finding of fact merely because it held a different opinion to that of the primary judge.
[emphasis added]
The primary judge gave thorough and carefully considered reasons.
The primary judge recognised that the “absence” of direct evidence on a question in issue requiring findings of fact to be made on that issue is not necessarily “fatal”: primary judgment at [79]‑[80]. His Honour said that it was open to him to make findings by drawing “appropriate inferences from other proven facts”, citing Gould v Vaggelas (1984) 157 CLR 215 at 236; Dominelli Ford (Hurstville) Pty Ltd v Karmot Auto Spares Pty Ltd (1998) 38 FCR 471 at 483; and Barnes v Forty Two International Pty Limited (2014) 316 ALR 408 at [184] as authority: primary judgment at [80].
His Honour was not prepared to infer either reliance or inducement, given (primary judgment at [82]):
(a)the recognition by Mr Griffiths and Dr Griffiths that the vehicle might not be delivered by the end of August 2015 as revealed by the uncontroversial conversation with Mr Johnson concerning what would occur if the vehicle was not delivered by the end of August 2015 (i.e., the provision of a loan car);
(b)the apparent satisfaction that Dr Griffiths and Mr Griffiths had with Mr Johnson’s answer to that question;
(c)the failure by the parties, and in particular Dr Griffiths, to set out an estimated delivery time for the vehicle in that part of the form specifically reserved for that purpose; and
(d)Dr Griffiths’ own evidence in her affidavit filed on 15 February 2016 that she felt assured that the vehicle would “arrive by approximately early September [2015]”.
The appellant also contended that the primary judge “erred by not adopting a common sense approach to the implication of reliance on the delivery representation in circumstances where [his Honour] found the respondent made the delivery representation and that the representation was misleading and deceptive”. The delivery representation was a representation as to a future matter and having been made in circumstances where there was no reasonable basis for making it, the conduct constituted a contravention. However, reliance upon the representation remained a critical integer of the cause of action.
As to a “common sense” approach, in Gould v Vaggelas at 238‑239, Wilson J expressed these observations:
[w]here a plaintiff shows that a defendant has made false statements to him intending thereby to induce him to enter into a contract and those statements are of such a nature as would be likely to provide such inducement and the plaintiff did in fact enter into that contract and thereby suffered damage and nothing more appears, common sense would demand the conclusion that the false representations played at least some part in inducing the plaintiff to enter into the contract. However, it is open to the defendant to obstruct the drawing of that natural inference of fact by showing that there were other relevant circumstances. …
[emphasis added]
Evidently, the primary judge was satisfied that no such natural inference ought to be drawn of either reliance (or inducement). The “other relevant factors” were principally those set out at [82] primary judgment and [61] of these reasons.
The fact that prior to Dr Griffiths entering into the contract, Dr Griffiths and Mr Griffiths and Mr Johnson discussed “what would happen in the event that the vehicle was not delivered by the end of August”, taken together with his Honour’s finding that there was “no evidence to suggest that either Dr Griffiths or Mr Griffiths found the explanation unacceptable”, meant that the primary judge was not persuaded on the balance of probabilities that there was reliance or inducement. The primary judge considered all the evidence of the critical conversations and found that the “delivery time for the vehicle” although of “some significance … was not important or essential to Dr Griffiths’ decision to purchase the vehicle” and that “satisfactory alternative arrangements might be put in place if the vehicle was not delivered by the end of August 2015”.
The primary judge essentially seems to have taken the view that although Dr Griffiths required a vehicle by the end of August 2015, as it transpired, it did not matter whether their car was made available by the end of August 2015, just so long as, ultimately, a car, in this instance a loan car, was available to them. Therefore, although the delivery date was of some importance, the delivery date was not essential or important to the decision to purchase. Getting rid of a Mercedes Benz that was suffering from “persistent mechanical breakdowns” and acquiring a BMW vehicle (perceived to be reliable) seemed to be the dominant feature driving the decision‑making of Dr Griffiths and although “timing” was important, it was not important enough or critical (according to the findings) to the transactional decision‑making itself to buy the BMW. So long as arrangements could be in place for a possible loan car pending delivery of the BMW, the purchase transaction could be safely made.
The “satisfactory alternative arrangements” of a loan car being made available was said, by Mr Oliver, to be “somewhat of a red herring” (T, p 9, ln 42). However, the primary judge was entitled to consider that matter and any conversations relating to it in deciding reliance.
In the circumstances, I am not satisfied that there is any error attending the primary judge’s findings of fact. His Honour makes plain the reasoning process by which the Federal Circuit Court reached its decision. The inferences drawn were neither “glaringly improbable” nor “contrary to compelling inferences”, to use the language adopted by their Honours in Robinson Helicopter. They were open on the evidence and ought not be disturbed.
In the absence of any demonstrated error, it is not for this Court to substitute its own views and conclusions about factual questions in issue before the Court below.
Findings of fact by the primary judge: uncertainty point
On the front of the purchase contract there is a “space for the inclusion of ‘Special Conditions’”, within which were printed the words “No Other Offer Applies subject to Finance 5 yr 15km gfv $2299.00 p/m epp AMA memeber (sic)”: primary judgment at [27].
On the reverse of the purchase contract, clause 4 of the ‘CONDITIONS’ dealt with finance although a precondition to its operation, namely that certain details should be filled in on the front of the purchase contract, had not been satisfied because the “relevant portion … had been left blank”: primary judgment at [28].
The meaning of the expression subject to finance, as understood by Dr Griffiths, was said to be “entirely unclear”, with the submissions made on her behalf of no “assist[ance]” in this respect: primary judgment at [29]. In contrast, the respondent asserted that that expression meant that “the contract was subject to Dr Griffiths securing a finance approval sufficient to permit her to complete the purchase of the motor vehicle according to the terms of the contract”: primary judgment at [29].
According to the primary judge, the evidence demonstrated that (primary judgment at [29]):
… Dr Griffiths intended to seek finance from an organisation called BMW Finance to finance the vehicle purchase. She had previous experience with BMW Finance and wished to finance the vehicle pursuant to what was described as a “full circle” package. She wanted a guaranteed future value for the vehicle at the end of the finance period – the abbreviation “gfv” signified that. Dr Griffiths specified in the written contract the amount she wished to pay by way of monthly lease payments for the vehicle, namely $2299 per month.
Mr Craig Henderson (“Mr Henderson”) was an employee of the respondent and was also an authorised representative of BMW Finance Australia Ltd (“BMW Finance”). He was tasked with what was said to be “an application for finance by Dr Griffiths for the purposes of the purchase contract”: primary judgment at [31].
In order for that application to be completed, Mr Henderson needed to obtain, from Dr Griffiths, further information about various matters, including her typical expenses and her income. He called Dr Griffiths for that very purpose during the early evening of 6 June 2015 (at around 5.30pm), shortly after the Griffiths family had left the dealership.
Mr Henderson knowingly, incorrectly, recorded Dr Griffiths’ then present income in the application. The primary judge found that it was likely that “the loan application details that were submitted by Mr Henderson for Dr Griffiths’ finance on 6 June 2015 to BMW Finance were obtained by him from the information already held on the BMW Finance system in relation to Dr Griffiths”: primary judgment at [36]. Earlier, in 2012, Dr Griffiths had made an application for finance with BMW Finance.
BMW Finance operates an “automated finance approval system”, whereby loan applications (such as that of Dr Griffiths) are processed electronically and are either granted approval or approval is withheld. This approval “can happen without the particular customer seeking the finance sighting, or signing, any documents including an application for the provision of finance. That is what occurred in this case”: primary judgment at [37].
Mr Henderson submitted Dr Griffiths’ application for finance on 6 June 2015 (at 5.38pm) and, at that time, received an automated email confirmation that the application had been approved by BMW Finance’s system: primary judgment at [37]‑[38]. On 8 June 2015, the respondent ordered the vehicle from BMW’s head office.
The primary judge also made the following observations, which are extracted from the primary judgment (at [39]‑[40]) and included in full in these reasons:
39.However, the approval was not unconditional. At best, it was a conditional approval because Dr Griffiths needed to verify the financial information that she had provided (or Mr Henderson had otherwise obtained) for the purposes of the application and provide further information. Those matters according to the evidence of Ms Crosby [another witness who gave only oral evidence] are generally attended to at settlement when the motor vehicle is delivered and the funds are provided for its purchase. At that point the customer obtaining the finance provides a signed confirmation of the details contained within the loan application form.
40.In my view, such a loan approval was not an approval for the purposes of the special condition contained within the contract of sale between Dr Griffiths and Brisbane BMW. That special condition required an unconditional finance approval. No such unconditional finance approval was obtained by her or on her behalf. In those circumstances the condition was not fulfilled.
[emphasis added]
Relevant to the uncertainty point, more specifically, are the primary judge’s observations at [56]–[61].
At [56], his Honour held that:
The special condition to the effect that the contract is “subject to finance” does not make the contract uncertain. Courts will generally strive to give a term in a contract meaning. Clauses such as the stipulation in this contract are generally valid.
[emphasis added]
In support of this finding, his Honour cited Meehan v Jones (1982) 149 CLR 571, in which Gibbs CJ said of a “special condition” which was expressed as being approval for finance “on satisfactory terms and conditions in an amount sufficient to complete the purchase hereunder” that “[i]t is only if the [C]ourt is unable to put any definite meaning on the contract that it can be said to be uncertain”. In that case, the Court unanimously held that the contract was not uncertain, in the circumstances.
Accordingly, the primary judge held that, “[i]n the present case, the “subject to finance” clause is not too indefinite to be construed”: primary judgment at [57].
The primary judge comprehensively explained the basis upon which his Honour was prepared to make that finding, that is to say (primary judgement at [57]):
… The complete term inserted in the written document is “subject to Finance 5 yr 15km gfv $2299.00 p/m”. Both Dr Griffiths and Mr Johnson gave evidence about what the abbreviations in that phrase stood for. The finance to be secured was over a five year term requiring payments of $2299 per month. A balloon payment at the end of the term was contemplated by Dr Griffiths. The essential terms of the finance to be obtained were specified in the phrase itself. Dr Griffiths’ counsel argued that given that 5 years of payments at $2299.00 per month falls short of the whole purchase price set out in the purchase contract, the term is uncertain. But I do not think that is the case. Dr Griffiths was after a particular finance product provided by BMW Finance which required monthly payments and then a balloon payment at the conclusion of the finance term. The requirement for a balloon payment at the conclusion of the term provides an explanation for the difference in the purchase price and the sum of the monthly repayments over five years.
The primary judge also examined what his Honour referred to as the “second basis” for determining that the finance clause is uncertain, namely that it provides “no time within which the finance is to be secured”: primary judgment at [58]. On that point, his Honour “recalled that clause 4 has no application and so the time frames set out in that clause have no application either”: primary judgment at [58].
Relevantly, his Honour stated that where the contract is effectively silent as to the time specified for the performance of a contractual obligation, the law will impose a requirement that it be performed within a “reasonable time”, citing Reid v Moreland Timber Co Pty Ltd (1946) 73 CLR 1 at 13; and Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537 at 543: primary judgment at [58].
The primary judge also found that the finance clause is “plainly a condition precedent to the obligations of Dr Griffiths to perform the purchase contract as the submissions for the respondent conceded” and that “the finance clause does not render the purchase contract uncertain”: primary judgment at [59].
His Honour then went a step further and stated that even if assuming that the contract was rendered uncertain, the clause would simply be “severable from the rest of the purchase contract”, in any event, due to the operation of clause 17, set out below:
17.Severability. Any provision of this Contract, which is invalid or unenforceable, is ineffective to the extent of the invalidity unenforceability without affecting the remaining provisions of this Contract. The parties will negotiate in good faith to replace any such provision with a provision which is valid and enforceable and consistent with the intention of this Contract, so far as is reasonably practicable.
[original emphasis]
His Honour therefore found that (primary judgment at [60]‑[61]):
… in either event the purchase contract is not void for uncertainty … [and] is not “incomplete and so ... void” as contended for by Dr Griffiths because the date for delivery is not specified in the purchase contract or because it is subject to finance.
On appeal: the uncertainty point
The appellant contends that the primary judge erred in finding that the purchase contract was not void for uncertainty on the basis that the subject to finance clause is uncertain:
(a)as to content in that it did not disclose the full amount of the money to be advanced and repaid to BMW Finance; and
(b)silent as to the timeframe within which the finance was to be offered by the respondent and accepted by [Dr Griffiths].
[emphasis added]
The respondent claims that the appellant, in her written submissions, “seek[s] to advance fresh arguments raised for the first time in the appeal”.
Those arguments are summarised as:
-because BMW Finance had a discretion as to if or when to offer finance, the clause was not “beneficial” to the appellant; and/or
-because no time was specified for a financier to offer finance, the appellant was left “locked into” a contract which provided no benefit to her”, thus rendering the contract uncertain.
[emphasis added]
The further two arguments made in the written submissions are that:
-events subsequent to the contract being performed rendered the contract uncertain; and/or
-if the uncertainty was cured by applying the severance clause, this would result in there being no finance condition and, it follows, that the contract would become a “cash contract”, a consequence which the parties “clearly did not intend”.
[emphasis added]
The uncertainty point
In relation to the four “fresh” arguments (mentioned above at [92]‑[93]), I accept that those contentions were not put to Judge Jarrett at the trial. As a result, they are not specifically addressed in the primary judgment.
In Coulton v Holcombe (1986) 162 CLR 1 at 7, Gibbs CJ, Wilson, Brennan and Dawson JJ remarked that:
To say that an appeal is by way of rehearing does not mean that the issues and the evidence to be considered are at large. It is fundamental to the due administration of justice that the substantial issues between the parties are ordinarily settled at the trial. If it were not so the main arena for the settlement of disputes would move from the court of first instance to the appellate court, tending to reduce the proceedings in the former court to little more than a preliminary skirmish. The powers of an appellate court with respect to amendment are ordinarily to be exercised within the general framework of the issues so determined and not otherwise. In a case where, had the issue been raised in the court below, evidence could have been given which by any possibility could have prevented the point from succeeding, this Court has firmly maintained the principle that the point cannot be taken afterwards …
In University of Wollongong v. Metwally [No. 2] (1985) 59 ALJR 481, the High Court (Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ) stated at 483 that:
It is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so.
There are no exceptional circumstances which warrant the raising of new arguments on appeal. The appellant has different counsel for the present proceeding, which may in some way explain the new arguments, but it does not permit them to be made. More fundamentally, the question of whether the clause is or is not “beneficial” to the appellant because it is said to operate upon the financier’s discretion as to whether an offer of finance will or will not be made, might involve a question of construction or a question of mixed fact and construction. Evidence might have been called on other factual questions relevant to the new contentions concerning the uncertainty of the finance clause. The clause, in my view, is capable of a construction as conveying meaning to the parties. There can be little doubt that Dr Griffiths understood what was involved in buying the BMW on the finance terms in the contract as described and construed by the primary judge at [57] of the primary judgment. The verification of income and expenses data was to come at settlement. Dr Griffiths had previously purchased a car by engaging with the respondent’s finance arm. I am not satisfied that any error on the part of the primary judge on this footing has been made out.
The appeal is dismissed.
The costs of and incidental to the appeal are reserved for later determination. Submissions are to be put on in relation to costs in the event that costs cannot be agreed. In principle, the issue of costs will be determined on the papers.
I certify that the preceding ninety‑nine (99) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. Associate:
Dated: 11 October 2017
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