Gurdag v BS Stillwell Ford Pty Ltd
[1985] FCA 362
•29 JULY 1985
Re: NAZIRE GURDAG and SELAHATTIN GURDAG
And: B.S. STILLWELL FORD PTY LTD
No. G6 of 1984
Trade Practices
(1985) ATPR para 40 - 606
COURT
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIAN DISTRICT REGISTRY
GENERAL DIVISION
Forster J.
CATCHWORDS
Trade Practices - misleading and deceptive conduct - false representations as to condition of vehicle purchased for purpose of interstate transport - measure of damages under s.82.
Trade Practices Act 1974 ss. 52, 53, 82
Brown v. Southport Motors (1982) 43 A.L.R. 183
Yorke v. Ross Lucas Pty Ltd (1982) 41 A.L.R. 299
Toteff v. Antonas (1952) 87 C.L.R. 647
Gould v. Vaggelas (1984) 56 A.L.R. 31
Frith v. Gold Coast Mineral Springs Pty Ltd (1983) 47 A.L.R. 547
Gates v. City Mutual Life Assurance Society Ltd (1982) 43 A.L.R. 313
Brown v. Jam Factory Pty Ltd (1981) 35 A.L.R. 79
HEARING
ADELAIDE
#DATE 29:7:1985
ORDER
There be judgment for the applicants against the respondent for the sum of $35,000.
JUDGE1
The applicants who are husband and wife purchased a prime mover from the respondent on 10th February 1981. The second applicant (Gurdag) conducted all the negotiations leading to the purchase and drove the truck as far as it was driven, and carried out, assisted in or arranged for the carrying out of such repairs and modifications as were carried out after purchase. The first applicant (Mrs Gurdag) was a silent partner of Gurdag's and the purchase of the truck was in her name for reasons which are not important. The truck turned out to be unsatisfactory in a number of respects and broke down on a number of occasions. The applicants bring these proceedings under s.52 and 53 of the Trade Practices Act and seek damages under s.82.
Gurdag is Turkish born and his use and understanding of English are both poor. He is given to rather flowery and exaggerated modes of speech and some allowance must be made for this and his indifferent understanding of the language when evaluating his evidence. I think also that his memory is not good and that he has confused certain trips in the truck with others and his precise recollection is poor. He exhibited a certain lack of honesty in his dealings with the Department of Social Security on pension matters and in addition was occasionally untruthful and inaccurate when giving evidence. I would prefer to have some corroboration of his evidence before accepting it.
Campbell, the Sales Manager for the respondent's used truck division in Adelaide, was not an entirely satisfactory witness. In answering questions about a transaction which took place more than four years before the hearing he tended to reconstruct on the basis of what usually happens when a truck is sold. Woodhart the salesman with whom Gurdag dealt was in my view a good honest witness but his memory of some details was understandably deficient. I have no criticism as to the other witnesses, indeed it was conceded on both sides that I should accept them as truthful and accurate. I was particularly favourably impressed with Williams the mechanical engineer who examined the vehicle in 1984.
Gurdag who was in partnership with his wife in a butcher's shop in suburban Melbourne had in 1980 operated a small refrigerated truck selling tomatoes and other vegetables in Sydney and bringing fish back from Sydney to sell at the market in Melbourne. This small truck was damaged in an accident in October 1980 and was no longer fit for the purpose for which it had been used. Gurdag decided that he would buy a larger secondhand truck fit it with a refrigerated container and in the first instance, carry tomatoes from Victoria to Sydney, sell the tomatoes, buy fish and bring these fish back to Melbourne and sell them. He spent some time looking around for a suitable truck. He came to Adelaide whence he had not precisely formulated plans to carry tomatoes to either Melbourne or Sydney and also to carry produce to Darwin. He eventually came to the secondhand truck yard of the respondent at Regency Park a suburb of Adelaide.
At the respondent's yard Gurdag looked at a Kenworth prime mover which appeared to him to be suitable for his purpose. If he bought it he intended to lengthen the chassis so that a refrigerated container could be mounted upon it. He had in Melbourne previously paid a deposit on a secondhand insulated container which is fitted with a mounting upon which a refrigerating motor could be fitted. Gurdag first spoke to Woodhart, the salesman employed by the respondent. I find that he told Woodhart that he wanted the prime mover in order to extend the chassis, fit a refrigerated container to it and use the vehicle for interstate transport. I find that Woodhart thought that the truck was, given its age, reliable, roadworthy and suitable for interstate transport and told Gurdag so. He also said to Gurdag that the prime mover had been safety checked and would be checked again before delivery. Gurdag offered a price which was below the listed price. Woodhart lacked the authority to sell below the listed price and took Gurdag to see Campbell, the used truck sales manager who told Gurdag that his offer was inadequate.
Gurdag went back to the yard on the following day and had further conversations with Woodhart and probably with Campbell. Details of these conversations are not clear but Gurdag expressed concern about the condition of the prime mover and in particular the condition of the engine. I find that he asked that a dirty and partially blocked injector on the engine be independently repaired at the respondent's expense. He was told by Campbell that an independent check could be done but that Gurdag would have to pay for it. I will return to this matter.
Campbell admits that at some time he would have said "the truck will be in acceptable condition". Woodhart says that he believed that the engine of the prime mover was reliable and admits that he may have told Gurdag this. Campbell also told Gurdag that the vehicle would be rechecked before delivery. It was the respondent's practice to make a final inspection of any vehicle which was sold prior to its delivery. A printed form existed on which was recorded the results of this final inspection. The inspection form relevant to the present transaction is in evidence (exhibit H) and it will be necessary to return to this later.
Gurdag made a final offer of $21,500 for the prime mover and returned to Melbourne saying that he would go no higher and that if the respondent wished to accept his offer it could let him know. On the night of 9th February 1981 Woodhart telephoned Gurdag in Melbourne and informed him that his offer was accepted. Gurdag returned to Adelaide on 10th February armed with a bank cheque for $21,500. I find that the bargain having been struck on the telephone, Bignell, the assistant to the sales manager, put the inspection process in train before Gurdag returned to the yard. I find also that when Gurdag arrived at the yard on 10th February the vehicle was in the respondent's workshop undergoing the inspection and that Bignell showed Gurdag exhibit H with the first two items in the list of known defects filled in in handwriting already, that the steering was "okay" and that the brakes, "ok, 67% Tapley test". Gurdag went to the office and signed the retail used vehicle order and agreement and handed over his cheque. At about the same time exhibit H duly completed was handed to him and signed by him, Gurdag took delivery of the vehicle and in due course set off to drive to Melbourne.
I deal now with the independent engine check. There is some confusion about this which may be due in part at least to Gurdag's difficulty with the language. He says that he thought the vehicle was sent to Cummins' diesel, the makers of the engine, so that a dirty injector which was making the engine run rough, at least when it was first started, could be cleaned. Campbell and Woodhart were clear that the vehicle went to Cummins for a type of engine test known as a "dyno" test. Woodhart took the vehicle to Cummins and a dyno test was done. The test revealed some potentially serious faults in the engine. Woodhart picked up the vehicle from Cummins and returned it to the respondent's yard and some time later Gurdag went to Cummins and paid $47-36 on their invoice for the dyno test. I find that he was neither shown the job card which revealed the faults nor told the information contained in it. I am unable to say whether or not the information was conveyed to the respondent but since the respondent had booked the vehicle in for the dyno test I think it likely that it was. When Gurdag went to Cummins to pay the amount due on the invoice I find that he had no interest in receiving a report as he thought that all that had been done was to clean the injector. In a case brought under the Trade Practices Act the state of mind and knowledge of the respondent are irrelevant but I think it more likely than not that the respondent was aware of the result of the dyno test. The whole question of the Cummins test is not very important but it does provide a good illustration of the sort of misunderstanding which can and did arise because of Gurdag's limited understanding of, and familiarity with English.
I come now to exhibit H completed during the final check of the vehicle in the respondent's workshop. I set out the form in full -
" STILLWELL VEHICLE INSPECTION NO. 55
An inspection having been conducted on the components listed below on (description of vehicle) Kenworth W925 S2 registered no. U/R, notice of the following defects which are believed to exist in the said vehicle is hereby given by Stillwell Trucks ("the Company") and received by (full name of Customer) ... ("the Customer):-
LIST OF KNOWN DEFECTS (to be described with reasonable particularity)
COMPONENTS KNOWN DEFECTS
1. Steering OK
2. Brakes OK 67% Tapley test
3. Tyres OK
4. Lights OK
5. Suspension OK
6. Chassis OK
7. Horn/Wipers L.H. wiper operate by hand only
IT IS HEREBY EXPRESSLY AGREED between the Company and the Customer as follows:-
1. No Warranty, conditions, descriptions or representation on the part of the Company is given or implied by this Agreement or has been given or is to be implied from anything said or written in the negotiations between the Customer and the Company or their representatives prior to this Agreement and any statutory or other warranty, conditions, description or representation expressed or implied as to the state, quality or roadworthiness of the said vehicle is HEREBY EXPRESSLY EXCLUDED.
2. Without limiting the generality of the foregoing, the Customer HEREBY ACKNOWLEDGES that it is his sole responsibility to take such steps as may be necessary to render the said vehicle roadworthy prior to use by himself or any other person and no undertaking to so render the vehicle roadworthy prior to such use is to be implied on the part of the Company by virtue of its disclosure of the defects detected in the inspection conducted by the Company.
3. The foregoing provisions, covenants and undertakings shall be incorporated in and form part of the Agreement between the Customer and the Company entitled 'Retail Buyer's Used Vehicle Order and Agreement' and dated the 10 day of 2 1981 (a copy of which Order/Agreement is annexed hereto).
4. (a) Words importing the singular number shall include the plural number; and
(b) the expression 'person' shall include a Company.
DATED the 10 day of 2 1981
........ ........ ....
Customer's signature ........ ........ ........ For and on behalf of the Company"
It is argued by counsel for the respondent that whatever representations may be made in this document they could not be said to have induced Gurdag to enter into the purchase of the vehicle because he had already handed over his cheque before he received the document. This argument however, in my view, mistakes the effect of the evidence. Prior to the cheque being handed over, indeed prior to the existence of any oral agreement for sale and purchase, both Campbell and Woodhart had told Gurdag that the vehicle would be rechecked before being handed over and this was a condition of the contract. In addition, Campbell said in evidence that he would not have permitted the transaction to continue if serious defects had been revealed in this final check. Gurdag entered into the bargain knowing and relying upon the fact that a final check would be carried out. If the final check had revealed serious defects I think it likely that Gurdag would have sought to withdraw from the transaction and if Campbell is to be believed, he would have been permitted to do so, at least until the defects were rectified. In these circumstances I consider that the representations made in exhibit H induced Gurdag to continue with the contract even if they may not properly be regarded as inducing him to enter into it.
Gurdag had an unsatisfactory journey to Melbourne driving the vehicle. Because of various problems which became apparent he drove very slowly and took nearly three days to complete the journey. The vehicle is fitted with a brake warning light which illuminates when the available air pressure to operate the brakes drops below a safe limit. During the journey if ever the brakes were used more than usual, such as when descending a hill or driving through a town, the warning light would illuminate and Gurdag would have to stop to enable the air pressure to build up again. While he was driving along, and particularly when cornering, Gurdag was able to see the differential moving sideways and he detected the smell of burning rubber. The chassis appeared to be unstable so that because of defects in the suspension the chassis would rub against the left hand rear tyre which produced the burning rubber smell. When starting off the oil pressure gauge showed pressure of 60-70 pounds per square inch but after driving for some distance the oil pressure gradually dropped to 30-25-20 psi. When the oil pressure got too low Gurdag would stop the engine and wait for a time and start again when the pressure would once more be 60-70 psi. This problem continued off and on until Gurdag reached Melbourne. On occasions during the trip, when he was driving at night, the lights of the vehicle would go off, obliging Gurdag to stop. After a time they came on again. There was a leak of diesel fuel from somewhere which caused a rear window of the cabin of the vehicle to become misted over. The odometer appeared to work but not the speedometer.
Gurdag says that he thought that these problems were relatively minor and once in Melbourne he set about rectifying them. So far as the brakes were concerned and the air leaks which caused the warning light to come on, he replaced many of the air hoses and tightened those he did not replace. He also replaced taps in the compressed air tank and repaired a weld in the side of that tank. This air pressure problem which also led to a difficulty in changing gear ratios was improved but was never entirely solved. So far as the unstable chassis is concerned, with the assistance of Selmanov, a motor mechanic who also gave evidence, Gurdag replaced some of the shackles and pins in the suspension and transposed others. Selmanov also saw the sideways movement of the chassis and the rubbing on the tyre. Selmanov discovered that the shock absorbers were worn out and he replaced them. He also replaced a cracked brake drum. Gurdag replaced a cracked spider hub and he and Selmanov replaced worn out wheel bearings. One way or another the problem with the suspension was adequately attended to.
Gurdag could not afford to have the engine overhauled and the problem with the oil pressure was never solved, nor was the problem with the fuel leak and there is no evidence as to what happened about the speedometer. So far as the lighting is concerned Gurdag replaced some of the wiring. This problem was never completely solved and was still present when Williams examined the vehicle in March 1984.
Gurdag had the chassis extended and fitted on to it the insulated container which he had bought but said that he did not have enough money for the time being to have a refrigerating motor installed upon it.
When Gurdag was engaged in replacing air hoses he discovered that the bell housing in the truck was partly cracked. This in itself was not dangerous but would have created a serious problem with the transmission if it had cracked right through.
When he had repaired the vehicle enough to make it in his view safe and proper to drive it to Sydney, he purchased eleven tons of tomatoes and set off for Sydney, a journey which should have taken eleven to twelve hours. Gurdag had problems with the truck once more. There was a continual loss of compressed air when braking and when changing gear ratios and he had to stop to enable the air pressure to build up. The oil pressure problem remained as also did the problem with the lighting system. A new problem emerged and that was of water leaks from the cooling system and he had to stop and refill the radiator every half an hour to an hour. One way or another he was compelled to travel very slowly and the journey to Sydney took two to three days and by the time he got there Gurdag found that the tomatoes were all bad and unsaleable.
He returned to Melbourne and did some more work on the vehicle, tightening the air hose connections and replacing brass piping in the cooling system. When he thought the vehicle was once more fit for the road he bought another load of tomatoes, half the size of the previous load and set off for the Sydney market again. This was also a slow trip due to most of the same defects in the truck and this smaller load of tomatoes was also almost entirely unsaleable on arrival. After his return to Melbourne, Gurdag did some more work on the truck and then tried an unloaded trip towards Shepparton, when the vehicle continued to give trouble and Gurdag had to travel slowly.
Having had quotations for the cost of overhauling the vehicle and its engine which were far beyond his capacity to pay, Gurdag set off for a slow trip to Adelaide in order to try to get the respondent to help him with his difficulties. I should mention that from when Gurdag first returned to Melbourne from Adelaide with the vehicle and for some time thereafter, he had his son Mustapha, whose English was better, telephone the respondent on his behalf to complain about the condition of the vehicle. Mustapha was never able to speak to Woodhart as he sought to do and Woodhart never called back as Mustapha asked. Eventually, after about thirty telephone calls, someone in the office of the respondent told Mustapha in rather coarse terms to go away and he tried no more. Gurdag came back to Adelaide on the second occasion and went to the respondent's premises and sought to speak to Campbell about problems with the truck. Campbell simply told him that the "truck was bought as is and with no warranty" and that there was nothing he could do about repairs to it. Gurdag drove slowly back to Melbourne and has not attempted to use the vehicle since.
I have said that I have certain misgivings about the accuracy of Gurdag's evidence, but nearly all of the findings I have made, received confirmation or corroboration from the evidence of Selmanov and of Williams and from the invoices tendered. There is no direct corroboration of the purchase of the two loads of tomatoes but that the trips were undertaken received some confirmation from the evidence of Mrs Gurdag and of Mustapha.
The findings which I am about to make as to representations made on behalf of the respondent by Campbell and Woodhart inducing Gurdag to purchase the vehicle are based very largely upon their admissions and concessions and upon exhibit H.
I find that the respondent represented to Gurdag that the vehicle would be in an acceptable condition, that it was, given its age, reliable, roadworthy and suitable for interstate transport and that the engine was reliable. In particular I find it was represented (inter alia) that the brakes, lights, suspension and chassis were "ok".
As the findings I have made as to the history of the vehicle immediately following its purchase indicate, these representations were all false. The finding is based on the evidence of Gurdag but is supported by evidence of Selmanov and that of Williams and also that of Wakefield, an experienced truck dealer, who gave his opinion that it was a "wrecking proposition" and would have been a wrecking proposition when purchased and incidentally, had a value then of $11,000.
I find that when sold the vehicle had serious problems with the suspension which was unstable and there were also serious defects in the supply of compressed air affecting the brakes and the change of gear ratios. There were leaks in the fuel lines. There was or were a fault or faults in the electrical system which led to to the lights flickering on and off, the cooling system was also defective and the engine generally was worn out as is evidenced by the apparently insoluble problem with the falling oil pressure.
I find support for these findings in the rather curious matter of the safety check carried out by the respondent's Sydney branch when the vehicle was first taken into stock on 1st May 1980. An entry on an internal invoice of the respondent (exhibit DD) on that date is "safety check - carried out check and report". The report on the safety check was called for first on 11th April 1985 early in the trial but was not produced although its existence was acknowledged from the bar table. It was said that it might take some time to turn up the document. The hearing was interrupted on 12th April and resumed on 29th May during which day the report was again called for but not produced. No search for it was deposed to, nor was any explanation given for its non-production. It is possible to draw from this unexplained non-production an inference that there was something in the report on the safety check unfavourable to the respondent's case and favourable to the applicants' case. A further factor is that the respondent called no technical evidence so that the evidence of Gurdag, Selmanov and most important, Williams, was uncontradicted by other evidence.
Because of my misgivings about the accuracy of Gurdag's evidence taken alone, I cannot be satisfied that all the representations alleged in the statement of claim to have been made were made, but I am satisfied, as I have said, that the respondent represented to him that the vehicle he purchased was generally reliable, roadworthy and suitable for interstate transport and that in particular the engine was reliable and the brakes, lights, suspension and chassis were "ok". These representations were untrue and constitute misleading and deceptive conduct engaged in by the respondent corporation in trade or commerce, contrary to s.52 of the Trade Practices Act and constituted false representations contrary to s.53 of the Trade Practices Act. The applicants were induced to enter into the contract for the purchase of the Kenworth prime mover by the conduct of the respondent and are entitled to recover damages pursuant to s.82 of the Act. Indeed it was not argued for the respondent that if I found that it had been guilty of misleading or deceptive conduct (s.52) or of making false representation (s.53) the applicants were not entitled to damages. It remains to assess those damages.
The only evidence as to the present value of the vehicle is that of Wakefield. No contradictory evidence was called. I find therefore that at the time it was purchased for $21,500 the vehicle was worth $11,000 which, according to Wakefield, it is still worth. No doubt the applicants are entitled to damages in the amount of $10,500 at least.
It is claimed on behalf of the applicants that in addition to this they should recover damages under six other heads.
(1) The cost of repairs to the vehicle carried out to rectify some of the faults, namely $4,603.
(2) The cost of extending the chassis so that the insulated container could be fitted, $2,650.
(3) A proportion of $3,000, the cost of purchasing the insulated container, namely $1,500.
(4) The cost of the two spoiled and lost loads of tomatoes, namely $8,000.
(5) The loss due to having to borrow money to finance the purchase of the vehicle.
(6) $30,000 for loss of profits for a period of 15 months. Interest is also claimed on moneys expended.
It is argued on behalf of the respondent that the measure of damages should be restricted to the difference in value of the vehicle purchased and its purchase price. Brown v. Southport Motors Pty Ltd (1982) 43 ALR 183, Yorke v. Ross Lucas Pty Ltd (1982) 41 ALR 299 and Toteff v. Antonas (1952) 87 CLR 647 and Gould v. Vaggelas (1984) 56 ALR 31 are cited in support of this argument. These cases however lend only qualified support to the argument that in a case like the present, damages should be restricted to the difference in value between the vehicle and the price paid. No doubt this is the starting point, but in the case of an assessment of damages pursuant to s.82 of the Trade Practices Act, it is not necessarily the finishing point.
In Frith v. Gold Coast Mineral Springs Pty Ltd (1983) 47 ALR 547 Fitzgerald J. says at p 565 -
"Similarly, in my opinion, whilst common law rules as to the measure of damages in tort may, in appropriate circumstances, provide a useful guide, no justification exists for confining the damages which are recoverable under ss 82 and 87 of the Act by reference to common law tests. The only limitations which exist in proceedings under the Act are those expressed or inherent in the statutory provisions themselves.
It seems plain that the statutory right to damages now under consideration serves a wider purpose and is intended to have a broader ambit than the common law actions of tort or negligent misstatement. There is no indication of a legislative intention that the relevant common law rules should be first discovered, the reasons that led to their development, understood, and then that they should be adopted or adapted consistently with the policy of the Act, before the court performs its duty of assessing the amount to which applicants are entitled under the Act. It seems an arid exercise to enter upon such problems when what is in question is a claim founded on the Act. Particularly is this so, where, as in the case of deceit, there is scope for at least a degree of uncertainty as to what is the appropriate measure of damages.
The broad statement of the appropriate measure of damages in deceit which was adopted in Dolby's case, supra, accords with the statutory test, if, as I think, applicants who establish a cause of action under the Act are entitled to those losses which are the immediate result of the offending conduct and also to consequential losses if sufficiently direct. It is on that footing that I proceed in this case."
In Gates v. City Mutual Life Assurance Society Ltd (1982) 43 ALR 313 Ellicott J. says at p 332 -
"It is undesirable to lay down a general rule that the loss or damage suffered by a person as a result of conduct in breach of ss 52 or 53 of the Act, is to be assessed on the basis of principles applicable to an action for deceit and not those applicable to breach of contract and I do not think their Honours intended to do so. Sections 82 and 87 are general provisions and Parliament clearly intended to confer a wide general power to compensate an applicant who has suffered loss by contravening conduct."
In Gould v. Vaggelas (supra) Gibbs C.J. says at p 35 -
"If the purchaser, besides paying more for the business than it was worth, has suffered additional losses which resulted directly from the fraud he ought to be compensated for them. Of course the court must be satisfied that the loss did result directly from the fraud and not from some supervening cause such as the folly, error or misfortune of the purchaser himself, and must ensure that no additional compensation is given for losses when those losses, or the probability of their occurrence, has already been taken into account in determining the value of the business."
I deal with the various bases of claim for damages listed above in order.
(1) I consider that the cost of repairs to the truck carried out in order to rectify faults and thus to mitigate the applicants' loss should be allowed. The applicants are proved to have expended $4,603 and the actual amount spent is almost certainly more. This is however all that is proved by invoices and evidence. The respondent's efforts were largely fruitless because at the end of the day Gurdag was unable fully to rectify the compressed air problems and never attempted to rectify the oil pressure problem. The fact that this expenditure led to no increase in the value of the vehicle is, in my view, irrelevant. The effort and expenditure to rectify the faults was reasonably undertaken and it is sufficiently a direct consequence of the misprepresented condition of the vehicle when purchased. I allow $4,603 and interest on that sum, for four years at 10% making an additional $1,814-20. In all I allow $6,444-20 under this head.
(2) So far as the cost of extending the chassis is concerned I think that the applicants were foolish to expend this money when they had no reason to suppose that the vehicle was fit for interstate carriage when the oil pressure problem had not been solved. There is also no evidence of any adequate testing of the compressed air system and other faults in the vehicle after their repair, nor indeed, of any testing of it all. It was, in my view, imprudent to go ahead with this modification to a vehicle of uncertain reliability. The loss of this money did not result directly from the misleading and deceptive conduct or the misrepresentations but rather from "a supervening cause such as the folly or error of the purchaser himself" to use the words of Gibbs C.J. in Gould v. Vagellas (supra). I allow nothing under this head.
(3) So far as the purchase of the container is concerned the applicants still have this and have always had it. Whether or not the applicants were foolish to complete the purchase of this when they had a vehicle whose reliability they doubted, or certainly should have doubted, I do not need to decide because the money spent on the container is not lost as they still have it.
(4) So far as the two loads of tomatoes are concerned I think that the applicants were most imprudent to buy them when the reliability of the vehicle was, or should have been, in such doubt. Had the applicants tested the vehicle adequately before Gurdag embarked on the two trips, the position might have been different, but as it is, I think that once again, folly or error has intervened. I do not allow damages under this head.
(5) I consider next the claim by the applicants with respect to loss which they say they have suffered by reason of having borrowed money in order to purchase the vehicle which, together with interest, they have had to repay by selling other assets instead of from their anticipated profits from the use of the vehicle. They borrowed in all $20,800, $3,781-68 of which went to repay an existing loan. Eventually they repaid $24,224 on the balance of the loan and interest thereon. $20,442-32 is claimed as the amount of the repayment attributable to the purchase of the vehicle. This claim loses sight of the fact that the applicants still have the vehicle, said to be worth $11,000 and they will be compensated for the difference between this value and the amount paid so that their loss at most could only be the interest on this loan. Are they then entitled to an allowance of damages with respect to the loss of this interest or some part of it? I should say that I am not satisfied that the respondent was aware that the applicants had borrowed money in order to purchase the vehicle so that if foreseeability is a factor it is not made out. Quite apart from this I consider that this interest which the applicants had to pay is too remote an item in the calculation of damages and I allow nothing for it. See Yorke v. Ross Lucas Pty Ltd
(supra) per Fisher J. at p 321.
(6) So far as loss of profits is concerned it is of course true that the applicants made none of the anticipated profits from the use of the vehicle. The respondent knew that the applicants intended to use the vehicle for the interstate transport of goods and must have understood that they intended and expected to make profits from this transport. Had they purchased a satisfactory vehicle they would have made profits. As it is, having been induced to purchase an unsatisfactory vehicle, they made none. It is said that this loss flows directly from the inducement and was, in any event, if it be relevant, foreseeable.
It is pointed out that in Yorke v. Ross Lucas Pty Ltd (supra) Fisher J. allowed as an item of damage the quantified losses made by the applicants in carrying on the business concerned. The situation here is of course somewhat different, but nevertheless the applicants reasonably anticipated that they would make profits from the use of the vehicle which they were induced by the conduct of the respondent to purchase. That expectation has been frustrated by the condition of the vehicle. This loss of anticipated profit seems to me to flow directly from the conduct of the respondent and some allowance for it should be made in the assessment of damages. The assessment of damages under this head should be approached in a conservative manner and allowance should be made for the necessary expense in lengthening the chassis and fitting the insulator container. Care must also be taken to avoid overlapping. I start with the estimation of profit expected to be made for a period of twelve months since the applicants cannot reasonably expect to be compensated for loss of profits indefinitely, or indeed, for a long period given the age of the vehicle even if it had been in the represented condition. The figures of the witness Achatz, an accountant, expert in matters of road transport, give a conservative estimate of $2,000 per month as the expected profit. I make allowance for the cost of extending the chassis and installing the insulated container and later the refrigerating motor and am careful to avoid overlapping. I also adopt with respect, the remarks of Fox J. in Brown v. Jam Factory Pty Ltd (1981) 35 ALR 79 when he said at p 91 -
"The foregoing references to figures should not be taken as suggesting that the final award of damages is capable of precise calculation. This is largely a matter of estimation; it has been said to be a 'jury question' (Doyle v. Olby
(Ironmongers) Ltd (1969) 2 All ER 119; (1969) 2 QB 158 at 167 and 169)."
Bearing all these matters in mind and allowing for contingencies I allow the sum of $18,000 for loss of profit. I assess the total loss of the applicants at $35,000 and award this amount against the respondent. There will be judgment for the applicants in the sum of $35,000. I will hear counsel on the question of costs.
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