Hale, V.A. v AGC (Household Finance) Ltd

IN THE FEDERAL COURT

OF AUSTRALIA )

VICTORIA DISTRICT REGISTRY

1 VG No. 137 of 1985

GENERAL DIVISION

)

Between:

VICTOR ALEXANDER

and BEITY JOY

(Applicants)

m: AGC

(HOUSEHOLD

FINANCE) LIMITED

and CUSTOMTONE

KITCHENS AUSTRALIA

PTY. LTD.

(Respondents)

Judqe Makins Order: Smithers J.

Date of Order:

5 December 1985

Where

Made:

Melbourne.

MINUTE OF ORDER

THE COURT ORDERS

THAT:

1. The applicatlon is dismlssed.

2 .

The

cross-claim of AGC

(Household

Finance)

Limited

against Victor Alexander Hale and Betty Joy Hale and

Customtone Kitchens Australia Pty. Ltd., is

ad~ourned

a date to be fixed on the application

of any party.

i -

2 . t-,

3. Vlctor Alexander Hale and Betty Joy Hale are to pay such costs as are referale exclusively to thelr claim f o r

relief under the Trade Practices

Act 1974.

I	i
i	I .,,

Stay order No. 3 until further order.

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NOTE: Settlement and entry of orders 1s dealt with in Order 36

i	of the	Federal	Court	Rules.
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IN THE FEDERAL COURT OF AUSTRALIA )

)

VICTORIA DISTRICT REGISTRY

) VG No. 137 of 1985

)

GENERAL DIVISION

)

Between:

VICTOR

ALEXANDER

and BETTY

JOY

(Applicants)

(Respondents)

Coram: Smlthers J.

5 December 1985

REASONS FOR JUDGMENT

Mr. and

Mrs.

Hale

seek

rellef

against

the

first

respondent AGC

(Customtone) on the ground that a transaction which they

entered Into with the second respondent (Customtone) on 4

January 1985 and that entered lnto wlth the first respondent

(Household

Finance)

Limited

(AGC)

and

the

second

respondent

Customtone

Kitchens

Australia

Ltd.

(AGC) in March 1985 were entered lnto under the belief that the prlce of a Customtone kitchen comprislng cabinets and

other kitchen equlpment to be installed

Customtone under

the first mentioned agreement was five thousand dollars and

that the cost of finance to be provlded by

AGC in respect of

that agreement was

$4.446 payable to AGC

at the rate of

$196.00 or $197.00 per month for four years.

Shortly prlor to 4 January 1985 Mr Hale rang Customtone

and it was arranged that Its representative would call. On 4 January, one Raymond Micaleff (RM), classified as an executive

deslgner of Customtone, called at the home of

Mr.

and Mrs.

Hale

negotiate,

possible, an

arrangement

for

the

Installation of kltchen

cabinets

and

other

equlpment

Customtone and if deslred the provlsion by

AGC of finance to

the applicants in connection with any arrangement that was

made. RM's interest

was that of a salesman on commlssion. He

was

experlenced

negotiatlng

kitchen

installations

Customtone and appears to me to have

an xcellent knowledge of

the detalls of what Customtone had to offer including the

prices of the cabinets and other equipment that mlght be under

L .

l	discussion and of what had to be done by	a customer to obtain
I

finance from AGC in relation to any sales made. He took with

him to the home

o t

the appllcants varlous brochures and

transparencles to assist in displaying what was available and

how the varlous items would tlt together. By his efforts the appllcants were Induced to look favourably upon a proposal

whlch was, In effect, that a new kltchen in the sense

of the

lnstallatlon by Customtone of a complete set of kitchen

equlpment, slnk, stove, dishwasher, cablnets and other Items

was

agreed

upon.

The applicants

decided

upon

a set

equlpment and lay out which appealed to them and decided they

would purchase that kitchen ensemble. There was of course

i	3 .
i	l

questlon of prlce. It appears that when

the approved Items

and layout were speclfled RM set down on

plece of paper or

book for rough entries a llst of the Items

agreed upon. From

then on there

1 s dlspute as to what occurred.

i	The applicants state in substance that	RM having written
1

down the items and costed them then said that the total was

$4,960, or a figure m that vlcinlty, and added "near enough

to $5,000".

It 1 s sald that this was stated

as belng the

actual price at whlch

RM was offering the total installation.

The appllcants say they had a discusslon between themselves,

that durlng thls conversation It was mentloned that

$5,000 was

i	I.
i

a lot of money, that Mr. Hale sald, however, that the money was golng to provide

_ .

a new kltchen and was acceptable and

Mrs.

Hale agreed. According to the appllcants

Mrs. Hale then asked

l	what the full prlce would be with Interest added	on the basls
I

that they would borrow money to pay

for the kitchen.

Mrs.

Hale sald that

RM made a telephone call and then said that the

cost of

the Interest would

be $4,446 and that meant that the

applicants would "be up

for" $9,446.

He wrote the figure on

piece of paper. At

a stage which is not easy

to identify

there was

a conversatlon between Mr. Hale and

RM in which

Mr.

!	Hale stated he would accept finance arranged	by Customtone.
!

He sald that

RM asked him how long It would take him to pay

off $9,446

and Mr.

Hale sald "four years" and that

RM said

that AGC preterred

a six year term. However,

It is not made

clear In the evldence of

Mr. Hale whether the period of the

finance agreed upon was four

o s1x years. Mr. Hale said that

when RM

asked hlm how long It would take him to pay off the

amount

of $9,546,

he sald

four years and RM sald that the

company preferred

s1x years. But whatever

It was understood

to be, RM quoted the monthly payment

as $196 or $197 per

month. Mr. Hale sald that at some stage

document called

"work

order

and

agreement"

and

another

called

"kltchen

contract specificatlon" were filled in by RM and

he and Mrs.

Hale signed

them.

The work order and agreement records a

transactlon or agreement to furnish the materlals and services

set forth In the speclfication for a prlce of

$9,446, that a

deposit of

$1,446 had been paid and that the balance payable

was $8,000

"on terms finance arranged wlth AGC".

Mr. Hale

says that in

vlew of the statement by RM that the total price

Including interest was $9,446, he understood this document to

reflect that situation. Accordingly, he took the

$8,000 to be

the balance payable after deducting the deposit, and similarly

Include

the

amount

all

the

instalments

including

prlnclpal and interest to

be pald over the period of the

finance.

Mr. and Mrs. Hale then sqned what was regarded by

all as an applicatlon

to AGC for

the necessary loan.

It is

common ground

that this document was taken by RM to Customtone

that day and that no copy of it was left

wlth

Mr. and Mrs.

Hale.

The so called appllcation form was really an offer by

the applicants to AGC to buy the new kltchen installation from

it. They did not see a copy of it until 9 April when a copy

arrlved from AGC by mall. It was then, for the first time

according to

Mr. Hale, that he realised that the application

provlded for payment by him and his wi€e of seventy-two payments of $197 amounting in all to $14,143.04. He

Immediately rang Customtone and sald

an error had occurred.

Thereafter there was correspondence between the sollcltor for the appllcants and Customtone and AGC.

The evldence of RM is in direct conflict with that

the applicants in various respects. He sald that in the

course of the negotlations on the day there was not only no

mentlon of $5,000 as the figure of the kitchen but no mention

of that figure at all. He said that for the most part he knew

by heart the prlces of the ltems to be Installed and that by

checking prices where necessary from the prlce list which

had, he calculated the total price for the

cabmets

to be

installed at

figure he cannot now state precisely, added

$1,774 for appliances and

he thlnks $1,290 for plumbing,

electrical services and administratlon and arrlved at

a otal

price of $10,196.

He remembered that Customtone was currently

glving a dlscount of

$750 to purchasers of kitchens who

contacted Customtone through certaln retailers and

he decided

to enquire whether Customtone would extend the same discount

to Mr. and Mrs. Hale.

He rang his head office and recelved a

favourable reply.

By deducting $750 from $10,196 he arrived

at the prlce to the Hales of

$9,446 and so Informed them. The

reconstruction of

the figure of

$10,196

as well as he can

thls stage Indicates that that figure is In the range of what mlght have been arrlved at during the exercise he descrlbed. He can only say definltely that that was the figure he arrlved

at by addlng

$750

to the

$9,446

which he quoted to the

applicants.

I accept hls evidence with respect to the manner

in whlch he came to quote the price

of $9,446.

RM said he

1 .

took up the questlon of

flnance with Mr. and

Mrs. Hale, and

, .-

they sald they would take finance through AGC.

RM obtained

relevant details of

age, occupatlon, Income, and resldence

from Mr. Hale, and discovered

Mr. Hale had a good credit

rating because, Inter alia, he had varlous credit cards. RM them to AGC forthwlth. There 1 s no doubt that most of the

rang Customtone and gave the details to Mr. McDade of

detalls now contalned In the applicatlon

(offer) form were

the possesslon of AGC by 12.15~111

on 4

January. Clearly they

had all been composed by RM before this time and recorded on	.-
!

paper.

So far as the deposlt was concerned RM

sald that as

Mr. and Mrs. Hale were presslnq urgently for

a 1

March

installation he took the view that it would be advisable to

present the transactlon to Customtone that very day all

complete wlth the deposit actually p a d and finance approved.

A bank cheque would have been as good as cash, but cash was

asked for,

and cash Mr.

Hale went to his bank and obtained.

, ,

According to RM this procedure ensured that the order by the

applicants received the hlghest prlority in the lists	of
Customtone's waitlng customers.

The points of evidentiary confllct

are, whether the

prlce for the kitchen was stated to be

$5,000, whether $9,446

was stated as the total prlce including Interest, and whether

the applicatlon form was filled in when the applicants signed

It.

On these issues I look first at

the probabilities. It

is no doubt posslble that a salesman wlshinq to

bring off a

_ .

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sale would underquote the price

at which he Intended to and

dld sign up

the customers. He mlght do

thls lust to procure

the	sale and make sure of his commlsslon. In this case he

mlght have had some

smister

deslgn to get a cash deposlt and

use the money

for some purpose, presumably temporary, of his

own.	If one puts these theories aslde there was certainly no

reason for

RM to cheat Mr and Mrs Hale. Having seen and heard

RM as a wltness I am quite satisfied that the notion that he

wished to galn possession of the cash deposlt for some purpose

of his own is just not to be

entertamed. He has

been a

salesman for some years and

1 s

obviously dedicated to the

Customtone business.

He apparently makes many sales. His

engagement wlth Customtone is something that he values and it

i '

seems most improbable that

he would imperil his position by a

blatant piece of fraud such

is suggested against him.

Nothing to his discredit was suggested, and to me

he appeared

an honest witness.

Indeed, Mr. Derham did not reject the

possibility that perhaps he mlsled the applicants without

meaning so to do.

But RM calculated the frnance required

as in respect of

$8,000 and not $3,554 or indeed $5,000.

He quoted the monthly

payment figure

of $196 or $197.

This was a figure given In

the AGC table ot

charges (Exhibit

CK6) for SIX years in

respect of a prlncipal sum of

$6,000.

It is clear that RM knew that the real prlce was He carried this as the prlce Into the document

$9 ,446 .

of purchase as

the price of the kltchen, deducted the deposit, and arrived

I 1.

the balance of

$8,000 payable "on terms flnance arranged wlth

AGC".

There

IS really no amblquity in the terms of this

document. They are not appropriate to reflect

a transaction

in whlch $9,446 lncludes the cost of interest on $9,446.

do that there should have been Inserted alongside the prlce of

$9,446, words such

as, "including the Interest on the money to

be ralsed to finance this transaction". If Mr. Hale thought

that this was what the document was meant to say It would

perhaps not have been unreasonable for him

to have said, "what

about adding the words 'Including interest"'. But even then

with the deductlon of the $1,446 deposlt the balance payable

would have been less than

$8,000

because the deposit would

have reduced the amount on which interest would have been and that $9,446 was the price with the cost of finance added

payable and the balance would not have been a round $8,000.

depends on the evidence

of Mr. and Mrs. Hale

which RM denies.

The question whether

$9,446 included the Interest depends on

the passage In which it

s Mrs. Hale who asks the question, in

substance "what will the total price be

with interest?"

It is clear from the way

RM gave his evidence that he

not the kind of man to mlsunderstand such a	question.	If he
was asked that questlon he could only have answered it

truthfully by worklng out figures appearing

In Part

I11 of the

application for

finance. The figure of

$9,446 was hls basic

prlce for the kitchen. It was

figure against which

Intended to obtaln a deposit and then arrange finance for the

balance over six years. It

would have lacked sense and been

- P

asking for trouble as well a?

bemg a blatant fraud for

RM to

have misled Mr

and Mrs Hale as 1 s suggested. Mrs. Hale said

that RM had said that the monthly repayments would be

$196 or

$197 and there is a strong probability that

he did so say.

is a fact that 48 monthly payments over four years would total

$4,956.

But this does not explain how the

$4,446

for the

finance Interest could have been arrlved

at by RM. To arrive

at the correct figure for finance

on $S,OOO it would have been

necessary for

RM to remember that after deducting the deposit,

the finance required was only for

$3,554.

Mr. Hale said that

when the

$197

per month figure was mentloned

he multiplied

this amount by

48 and arrived at

$9,456

which was almost

exactly the total sum payable for prlce and interest. But

$9,446 would surely have been seen as a large sum to pay in

respect of a loan of $3,554. This, on Mr. Hale's evidence,

must be taken to have escaped his notlce.

If, as

Mr.

Hale

sald. the arrangement for payment

a deposit was not

arranged until a late stage of the negotlations on

4 January,

that circumstance could explain the overslght. But, this can

not be so.

The deposlt was discussed and agreed upon before

noon. Mr. McDade was told about It.	! ;
,-'

According

the

applicants

a document

being

application to AGC for a loan of $8,000 was signed by them.

They say that It was signed at the request

of RM made by him

very shortly before he left their home. They say

he explalned

that he could not fill in the details sought In parts

2 or 3

of	the document because his electronic caluclator was not

worklng due to flat batteries.

Mr.

Hale says that when he

demurred at slqning an lncomplete document

RM sald that there

was "no risk" because the work order agreement signed earller

in the day set out the

tu11

amount payable and contained a

recelpt

for

the

deposlt.

sald

that

his

calculator

I ,

batterles were in good order. But he did not need it to fill

1	in parts	I1 and I11 of	the appllcation form.	All he needed
I

was In the AGC table of charges (Exhibit

CK6). RM stated that

he had never left

a customer's house with the application form

not completed.

am satisfied that the form signed by the

applicant was complete when signed by them. There was a

conversation arising out of the fact that RM

was

unable to

leave wlth the applicants the application

for finance.

explained to them that although he was not leaving that

document with them they were protected by the terms of the

work record agreement which had

on it a receipt for the

$1,446

deposit. There was no conversation concernlng Parts

I1 and

I	111 of the applicatlon for finance not being filled in.
I

~	On the issue whether the applicants have established on	i
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a balance of probability that RM misled them

as to the price

of the kltchen to be installed, the general probabilities are

all against XM havlng done

s o .

course, he might have

thrown all honesty to the wind

for the purpose of making the

sale for the sake of a comrnisslon. He mlght have wished to

ensure that the appllcants were put into a favourable mood to

enable him to obtaln

$1,446

In cash, for h m to use between

Friday mid-day until Monday. This latter notlon

15,

I am

qulte sure, after seelng and hearlng RM, not acceptable. The

former also seems quite Improbable.

RM has been employed for

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some years. I[e has obvlously mastered the llmlted role he

plays in selllng kltchens completely and appears dedicated to

dolng hls work well and has a prlde in so doing. He clearly

envisages hlmself as a long term operator In thls role. For

him to have told

a blatant lie to the applicants which

alleged would have mperlled hls position with Customtone to

enable him to make one commission is improbable. From what

appeared in evldence he makes many commissions. In addition,

the alleged fraud could have been exposed by one request to

hlm to add to any of the documents some words such as "total

price including Interest" or "total amount payable including

all instalments" elther to the price statement of $9,446 in

the work record agreement or the statement of the balance of

$8.000 after the deductlon of the $1,446. And of course if,

Mr.

Hale asserts, he believed that the prlce wlthout

interest was $5,000

and the approprlate

mstalments were $196

$197 per month, why he dld not question

why,

when the

$1,446

reduced

the

balance

outstanding

to approxlmately

$3,550, the rate of $196 or $197 per month was not reduced,

at least experience the feellng that	$8,000 to repay	$3,500
seemed rather high.

In addition, the form of accounting in the work record

of agreement was quite unsound if the sum of $9,446 was the

total price of

$5,000 plus $4,446 for a four

or s1x year term

of payment. Clearly, In that case, the $1,446 should have

been deducted from $5,000 with a consequent reduction in the

amount due In respect of the four

or s1x year term whlch would

make the $8,000

very hlgh as the total balance.

Mr. Hale sald

I , b

12.

he was not taking particular notice

of the amount of interest

charges because he anticipated paylng off the finance before

the arranged term expired, that he only wanted the finance to

enable him

to examme hls finances at leisure and was quite

wllling

lose

year's

penalty

interest

which

contemplated would be the cost of paylng off the loan before

the term expired. 7311s could of course be true, but after all

this was a fairly large transaction for the applicants to be

undertaking and one would have thought that Mr. Hale would

have wanted to have the price stated unambiguously and written

into at least one

of the several documents the applicants

slgned. He was quite experlenced

using and completing

, /

documents. If one searches the evldence	of Mr. and Mrs. Hale	1-
t

the only specrfic reference to the statement of a price

including the interest is in the evidence of what was said to

have been sald by Mrs. Hale. Relevant passages from the

evldence of Mrs. Hale are as follows:

"What did he say, to the best of your memory?

---

He was scrlbbling down on

a scrlbble pad. He

drew a clrcle

- I was looklng at the leaflets

- he drew a circle and he sald,

$5000.

said it is a lot of money for a kltchen.

sald to my husband: it is

a lot of money, and

he sald: not really, because we

wlll have a

new kltchen out of it.

I then said to Mr

Micaleff: all up, how much would it cost and he telephoned and came back and he said: all up I t 1s $9446.

...

What recollection

do you have as to the order of

events? ---

I know he quoted the

$5000, he

phoned up

on the telephone, he got off the

phone and he sald: all up

wlth your finance

it will be $9446.

He then asked with

husband how would we

like to pay, how long

would take and what

not.

13.

So that was the order of events? --- To the best

of my knowledge, yes.

’’

In evidence In chlef

of Mr. Hale the passage relevant to the

critical matter is

as follows:

“We agreed to have the kitchen.

Then we

asked, or actually,

I believe the wife asked,

what

actually

would

cost

for

the

kltchen. He

said it would be $5000 but then

there would be charges

on top of that in

relation to hire purchase. He asked me did

want to get the finance for it or did we want him to arrange it as they could arrange the finance.

What was the response? --- I

said seeing that we

are gettlng everythlng done through

him, that

I .

would he arrange the finance, whlch he agreed

to do.

Did you then discuss the cost of the finance with

Mr. Micaleff?

---

What occurred was he said

it was $5000.

Then he said, when we made the

discussion about the finance, I said yes, we

will take it through you people; we will do

the

lot

through

you.

did

some

calculations. Then he wrote

9446

on this

paper that he had. It was like a notepad, circled it and sald that is what you are up for. That is what you are up for.

At this point

- was this before or

after he had

telephoned his office concerning the finance

question? ---

I believe that is after he

telephoned

- used our telephone.

He rang

somebody but

I could not say exactly who he

spoke to but he did use our

telephone.

was after he had made the telephone call.“

It may be observed that RM had no need to ring his office to find out what the instalments to the finance company would be

on an advance of

$5,000 or of any amount. He carried a

booklet

the first respondent, being the

AGC table of

charges, setting out In great detall the relevant information

with respect to any amount repayable over any period. But for

”

14.

RM to Inform the applicants that

$9,446 was the total

price of

the kitchen he did need to contact his head office.

He sald

that the total amount at which he calculated the actual price

for cabmets and the other Items such

as electrlclty, plumblng

and administration came to $10,196 but that he deslred to get

approval to allow to the appllcants the $750 discount whlch

currently was being allowed f o r to people who bought through

retail stores.

In scrutinizlng the evidence of Mr. and Mrs. Hale there

was nothing

m thelr demeanour which would suggest that they

were conclous of departing from the truth. And yet I am satisfied that the critical statement that RM sald the price was $5,000 and the price with interest was $9,446 does not reflect the facts. One wonders how two persons of truthful

demeanour and good character could swear

so erroneously, and

not

only

about

the

prlce

but

also about

the

finance

applicatlon not belng filled in when signed

by them. It may be

that Mr. and Mrs. Hale did not examine the details

of the

application (offer) for

finance.

They

dld

not

see

that

r-.

document agaln until

Aprll or thereabouts. In the meantime

they had had a very disappointing and distresslng experlence

wlth Customtone. There were many delays and broken promises

and the kitchen was most unsatisfactory. I am forced to think

it possible that

on seelng the total amount In excess

5 ’

I .

$14,000 they were surprised that it was so high, began to

over the conversations they had had with

and persuaded

themselves that RM had sald that the

$9,446

was not what was

the total price

of the kitchen Including interest.

This could

well be

a product of their

dlstress due to the difficulties

they endured.

are,

application seeking relief from the respondents in respect of

mlsleading and deceptive conduct must be dismlssed.

however,

in unfortunate

rror

and

the

They

There are

cross-clams of AGC to be considered. There

1 s

no cross-clam

by Customtone. This

1 s

not surprlslng.

Clause 11 of the work	order and agreement	1s In the following
terms :

"The Clients are desirous

of obtaining the work and

materials on credit sales agreement and will offer

enter

Into

such

an agreement

wlth

AGC

(Household Finance) Ltd. Upon acceptance

of the

Clients' offer by AGC (Household Finance) Ltd. the

Contractor may proceed wlth

the work on their

behalf

and

this

instrument

shall

such

acceptance be replaced and determined."

Customtone has been pald $8,000

by AGC and no doubt assumes

that AGC has accepted the offer by the applicants to buy the

kitchen from It.

There

is no claim by the applicants against

Customtone In respect of the matters outstanding to complete	I :
the installations of the kltchen according to the agreement	I
between them and Customtone.

AGC

cross-clalms

against

Customtone

for relief

respect of loss suffered by it in the event of the applicants

16.

successfully

defending

the

cross-claim

against

it.

The

cross-clam of AGC agalnst the appllcants seeks

~udqment

for

$14,234.04 or alternatlvely damages tor breach

of agreement.

The breach of

agreement alleged 1 s not partlcularised. There

are no pleadings In these proceedings.

was acknowledged

that any defences open on the facts are available to the

applicants.

I make

the

following

observations

concerning

matters of potential defence.

It is conceded by AGC that

as no copy of the applicant's

offer of

4 January

1985 was left with the applicants after

being signed by them.

The provlslons of the Credit Act 1984

of the State of

Victoria operate to deprive It of entitlement

to recover Interest on the amount pald by

It to Customtone.

It is to be observed also that as the original application has

I-i

never been signed on behalf of AGC there may well be

an issue

as to whether AGC ever accepted the applicant's offer to buy

the

kitchen

from

it.

If it was

accepted

the

original

agreement

between

Customtone

and

the

applicants

was

"determined and replaced".

If It was not accepted that that

agreement is in force then the questlon of the extent of any

liability of the applicants to Customtone and any claim of the

applicants against Customtone would remain outstanding. There

would be an issue also

a to the entitlement of AGC to recover

the $8,000 paid by It to Customtone.

I ' d

17.

There is also a question arlsing under

the arrangement

between the appllcants and ACC as to whether	it	is not void
for uncertainty.

Perhaps In an effort to shorten the hearing most of

these Issues were not argued before me, or were inadequately

argued. But they appear to call for argument or settlement.

It may facilitate each

these eventualities if

I intunate

that I accept the evldence of Mr. Keatinq In all respects.

find as a fact that in no sense can it be contended by AGC that it has complied with the request of the applicants, in

consideration

compliance

wlth which,

the

appllcants'

obligatlons under the applicants' offer to buy depend.

I find

also that Customtone has failed to perform the obligations

which its agreement with the applicants would impose upon It.

I find also that the conduct of Customtone in relation to the

installation of the kitchen was grossly inefficient, that it

displayed an attltude of complete indifference to the faithful

I . .

supply

and

installatlon

the

kitchen

for

which

their

agreement provlded. In	view of the conduct and the attitude	i
' c
r,

of Customtone to Its responsibilities in relation to the

supply of the kitchen

It would be quite Justifiable

on the

part of the applicants to

termmate their agreement with

Customtone and to refuse to permit

to perform any further

supply or work relating to the installatlon of the kitchen.

Significant in relation to the inefflciency and attitude of

Customtone was the installatlon of a dishwasher too large for

the space provided with the result that

it cannot be removed,

. c E

18.

the supply

the wrong slzed refrigerator with the rcsult

that the Installation extends Into the famlly room, and the

installatlon of the wrong sized or shaped slnk.

In connection

with the failure

of the Installation to measure

to the

requlrements

the

applicants'

original

agreement

with

Customtone and to be reasonably fit for the purpose for which

it was intended, conditions arlsing under Part

V of the Trade

Practices Act

1974

with respect to the contract of sale

between AGC and the applicants, if any, requlre consideration

under its cross-claim.

Nothing has been made of

it in this case but I cannot

refraln from observing that the exerclse

of' Customtone on its

i	own behalf and on behalf of	AGC	of purporting to carry out	' ..
I
I	. ,.

what was transaction with the Hales was ill described

called

"arranging

finance"

respect

Its

as such. It was

I .

to arrange for the cancellation of all its obligations as soon

I ,'

a s

AGC accepted

the

"application"

for

the

finance.

That

acceptance brought into existence

a sale by AGC to the Hales

on terms deslgned to relieve

AGC from liability to the Hales

in respect of what was belng sold to them

so far as legal

ingenuity could ensure.

If a customer failed to realise that

this

provision

finance

released

Customtone

from

its

liabilities and substituted a new vendor and one with the

least posslble liability it would not be surprislng. What was

done, in the name

arranging finance, was to change the

nature of the transaction and possibly to reduce substantlally

the rights of the Hales In respect of the Installation of the	t ',
kitchen.

19.

So far as costs

are concerned the appllcants must pay

such costs as are referrable excluslvely to the Issues arising

under Its clam for relief under the Trade Practlces Act

1974

and I so order. I adjourn the cross-claim

of AGC against the

applicants and agalnst Customtone to	a date to be fixed on the
application of any party.

l ,-

I certify that this and the

preceding eighteen (18) pages are

a true copy of the Reasons

for

Judgment herein of his Honour Mr.

Smither .

Justice

Associate

Date: 5 December 1985

[1985] FCA 603

5 Dec 1985