Hollis, L.S. v P.H. & D. Stephens Investments Pty Ltd

Re: LEE STEPHANIE HOLLIS
And: P.H. AND D. STEPHENS INVESTMENTS PTY.LTD.
Nos. QLD G1 and G2 of 1985
Trade Practices

COURT

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Spender J.

CATCHWORDS

Trade Practices - false representation that goods have a particular history - whether constituted by inaccurate odometer reading of vehicle in car yard - whether a representation - meaning of "particular history" - Trade Practices Act 1974 s.53(a).

Trade Practices Act 1974, ss.53, 85.

Given v. C.V.Holland (Holdings) Pty.Ltd. (1977) A.T.P.R. 40-029

HEARING

BRISBANE
#DATE 10:5:1985

ORDER

The defendant be convicted in respect of both informations.

JUDGE1

These are two prosecutions for offences under s.79 of the Trade Practices Act 1974 ("the Act") arising out of contraventions of s.53(a) of that Act by the defendant, P.H. and D. Stephens Investments Pty.Ltd.

By consent, both prosecutions were heard together.
Each offence arises out of alleged false representations by the defendant that goods were of a particular history.
The first offence alleges:

"That on or about the sixth day of January 1984 P H AND D STEPHENS INVESTMENTS PTY. LTD., did in connection with the supply of goods to wit an XD Ford Falcon GL station wagon registered number 761-NSY, falsely represent to Robert Allen Lane that the said vehicle had travelled 60,690 kilometres whereas the said vehicle had travelled substantially in excess of that distance."

The second offence (which will appear as factually interwoven with the first) alleges:

"That on or about the tenth day of February 1984 P H AND D STEPHENS INVESTMENTS PTY. LTD., did in connection with the supply of goods to wit a Toyota Corona sedan registered number 857 NCP, falsely represent to Sheila Jacqueline Lister that the said vehicle had travelled 70,100 kilometres whereas the said vehicle had travelled substantially in excess of that distance."

It is not in dispute that:

(i) between receipt by the defendant of each of these vehicles and their subsequent sale, the odometers in each vehicle were replaced by employees of the defendant;

(ii) the odometer reading in each of the replaced odometers showed substantially fewer kilometres than were shown on the odometers which were replaced;

(iii) no sales representative or other employee of the defendant told the respective purchaser of each vehicle that the odometers had been replaced or that the readings shown on the odometer in the vehicle did not represent the distance travelled by that vehicle.

It is possible to state relatively briefly the facts which give rise to these informations.
In 1977, Robert Allen Lane purchased a new Toyota Corona sedan, with registered number 857 NCP, the vehicle the subject of the second information. In relation to this vehicle, Mr. Lane kept a petrol log book in which was recorded the distance travelled by the vehicle, its odometer reading, and the price and quantity of petrol on each occasion that it was purchased for the vehicle.
On 8 January 1984, the log book records that the odometer reading was 119,086 kilometres. Shortly afterwards, Mr. Lane traded this vehicle to the defendant on the purchase of the Ford Falcon station wagon, registration number 761 NSY, the vehicle the subject of the first information.
The Ford vehicle had previously been owned by Nicholas Kiwi (Pacific) Pty.Ltd. Trevor Jones, a former employee of that company, was the person to whom the vehicle was assigned within the company. In a sales representative's expenditure claim form, he recorded, amongst other things, the daily odometer reading, daily mileage, and particulars of petrol purchased. This form records that on 22 December 1983, when Nicholas Kiwi (Pacific) Pty.Ltd. traded the vehicle through Toowong Mitsubishi Motors, a retailer of new vehicles, at Milton Road, Toowong, the odometer reading was 139,834 kilometres.
Daniel Theodore Duggan, an account sales representative for Nicholas Kiwi (Pacific) Pty.Ltd., was familiar with the vehicle and had driven it on several occasions. He can recall that its odometer reading was approaching the 100,000 kilometre mark at about the same time as his own company vehicle was reaching that mark.
The used car stock book of Toowong Mitsubishi Motors records that the odometer reading of the vehicle at the time of its purchase by that company was 140,587 kilometres.
The evidence before me, which I accept, establishes that the vehicle, when traded through Toowong Mitsubishi Motors, had an odometer reading in excess of 61,000 kilometres.
On 28 December 1983, Toowong Mitsubishi Motors sold the vehicle to Brisbane Discount Motor Mart, the business name under which the defendant operated. No work had been done on the vehicle while it was in the possession of Toowong Mitsubishi, and it was sold to the defendant undetailed and uncleaned.
On a date which Mr. Lane now fixes as about 9 January 1984, he went to the premises of Brisbane Discount Motor Mart at 354 Gympie Road, Kedron, with the intention of purchasing an XD Ford Falcon station wagon. He was accompanied by his wife.
He there saw a Ford Falcon station wagon, registration number 761 NSY, which was on display. The price indicated was $6,999.00. On inspection, the odometer reading showed approximately 60,000 kilometres. He was approached by a sales representative of the defendant, who introduced himself as John Carry. Mr. Lane indicated that he wanted to trade in a 1977 Toyota Corona and purchase a Ford Falcon, subject to a satisfactory inspection by a R.A.C.Q. mechanic. He paid a holding deposit on that date, and the further holding deposit at a later date.
He contacted the R.A.C.Q. and a Mr. Ronnie Altmann, an R.A.C.Q. inspector, inspected the vehicle on 11 January 1984. In the course of that inspection, Mr. Altmann observed that the odometer reading was 60,693 kilometres.
On 13 January 1984, Mr. Lane took delivery of the vehicle, paid the balance of the purchase money owing, and was issued with a receipt. He was also issued with a certificate of roadworthiness. This was given by a servant of the defendant who indicated that the reading on 11 January 1984, when the roadworthiness certificate was issued, was 60,697 kilometres.
However, following a conversation between Mr. Lane's wife and Trevor Jones, Mr. Lane complained to Brisbane Discount Motor Mart that the odometer had been altered and that the vehicle had travelled considerably more at the time that he had purchased it than the odometer reading had indicated.
Some months later, an agreement was reached whereby the defendant supplied to Mr. Lane, in exchange for the Ford Falcon, a 1979 Fairmont with an odometer reading of some 42,000 kilometres. This odometer reading was supported by original log books.
Between the time of his complaint and this agreement, Mr. Lane conducted a Main Roads search in an attempt to locate the person who had purchased the Toyota Corona which he had traded in on the Ford Falcon. He had, after that trade in, observed the vehicle in the used car yard of the defendant, and had inspected it on an evening in February 1984. He gave evidence that that inspection seemed to indicate that a '1' did not appear in the 100,000 mark on the odometer, as it ought properly to have in the light of the kilometres travelled prior to its trade in.
Through the Main Roads search, Mr. Lane located Shirley Jacqueline Lister, the purchaser of the Toyota Corona.
At the time when Mr. Lane traded that vehicle in, its odometer reading was 119,686 kilometres. This is recorded on the stock card of the defendant. The vehicle was then sent to a self employed motor mechanic, Peter Francis Whitbourne, who issued a roadworthiness certificate for the vehicle as well as a job cost card. On both of these documents he noted that the odometer reading was 119,750 kilometres. The job cost card also noted that there was an erratic speedometer.
On 16 February 1984, Mr. Whitbourne again inspected the Toyota, and issued a further roadworthiness certificate. On this occasion, he noted on the certificate that the odometer reading was 70,120 kilometres.
Previously, on about 10 February 1984, Mrs. Lister had gone with her son to the premises of Brisbane Discount Motor Mart and had there spoken to a sales representative, John Legg. She had indicated to him that she was interested in the two Toyota Coronas which the defendant had advertised, both priced at $3,899.00.
She drove the Toyota Corona, registration number 857 NCP, noting that it had approximately 70,100 kilometres on the odometer.
On about 17 February 1984, Mr. Lee called at her residence and, after some discussion about the price, she agreed to purchase the vehicle for $3,724.00, which was to include sales tax on the vehicle. She arranged to collect the vehicle on Monday, 20 February 1984. On that day, she went to Brisbane Discount Motor Mart and took possession of the vehicle.
On no occasion did Mr. Lee, or any other employee of Brisbane Discount Motor Mart, inform Mrs. Lister that the odometer had been replaced or altered in any way. Similarly, on no occasion did Mr. Carry or any other employee of Brisbane Discount Motor Mart inform Mr. Lane that the odometer in the Ford Falcon had been replaced or altered in any way.
Some time after the purchase, Mrs. Lister made a complaint to the defendant. She subsequently declined their offer to refund her purchase money and has since disposed of the vehicle at a small loss.
There is no dispute that the defendant is a trading corporation and was at all material times engaged in the trade of selling used motor vehicles. The evidence establishes that it is quite a large used car dealer and has a large used vehicle display yard. The defendant employs six mechanics and a staff in excess of thirty.
There is no challenge to the evidence that the Ford Falcon had travelled in excess of 140,000 kilometres at the time that it was acquired by the defendant and that, at the time of its display, inspection, and subsequent purchase by Mr. Lane, the odometer in that vehicle read under 61,000 kilometres.
In the case of the Toyota Corona, there is no challenge to the evidence that the vehicle had travelled in excess of 119,000 kilometres at the time that it was traded in by Mr. Lane to the defendant and that, at the time of its display, inspection, and subsequent purchase by Mrs. Lister, the odometer reading on that vehicle was under 71,000 kilometres.
In both cases, the odometer reading at the time of each vehicle's display and subsequent purchase indicated substantially fewer kilometres than that vehicle had actually travelled.
Counsel's submissions on behalf of the defendant fall into two categories.
The first such category was not strongly pressed. It relates to the evidence of Mrs. Lister.
She says in her evidence that the Toyota Corona inspected by her and the odometer of which she recalls having noted had registration number 587 NCP. The vehicle the subject of the second information, though, is a Toyota Corona registration number 857 NCP. However, it is clear beyond argument, from both the documentary and oral evidence before me, that the vehicle inspected by and sold to Mrs. Lister was the vehicle the subject of the second information. This transposition is a mere and understandable misdescription and, in fact, had also occurred in conversations between officers of the Trade Practices Commission and Peter Henry Stephens, a director of the defendant, on 6 July 1984.
The second submission within this first category relates to a variance between the date at which the first information alleges a false representation as to the Ford Falcon was made and the evidence of Mr. Lane as to the date that he inspected that vehicle.
The information alleges the representation to have been made on or about 6 January 1984, while Mr. Lane gave evidence that he now thinks he inspected that vehicle on 9 January 1984.
However, in my view, his evidence is not inconsistent with the allegation contained in the information and, in any event, were I to be of a different view, I would amend the information to accord with the evidence.
A further submission within this first category is, however, of more consequence. It relates to the evidence of Mr. Lane as to the odometer reading at the time of his inspection of the vehicle.
In the course of his evidence, Mr. Lane stated that, when he inspected the Ford Falcon at the defendant's premises, his recollection of the approximate mileage shown on the odometer was "sixty thousand and something. I only looked at the first two digits."
However, the information in respect of that vehicle contained an allegation that the defendant falsely represented to Mr. Lane that the vehicle had travelled 60,690 kilometres, whereas it had travelled substantially in excess of that distance.
The evidence, however, does not establish with absolute precision what the odometer reading at the time of the first inspection by Mr. Lane was. Even so, the gravamen of the offence is the representation that the odometer of the vehicle indicated that it had travelled something in the order of 60,690 kilometres, whereas it had in fact travelled substantially in excess of that distance.
Moreover, the evidence establishes that the actual odometer reading in the vehicle increased by small amounts during the period between its initial acquisition by the defendant and subsequent sale to Mr. Lane.
In my view, the dictates of justice require that that information and summons be amended so as to accord with the nature of the case which, on the material, the defendant was called upon to meet and has, in fact, attempted to meet. That case was that the false representation was that the vehicle had travelled something under 61,000 kilometres when in fact it had travelled substantially in excess of that distance. Accordingly, the amendment would embody that allegation.
In fairness to counsel for the defendant, it was not asserted by him that this formulation in the charge constituted a basis on which the defendant was entitled to be acquitted.
It was accepted by counsel for the defendant that, between the date of receipt of the vehicles by the defendant and their subsequent sale, the odometers in each had been replaced by servants of the defendant, each such replacement odometer showing considerably fewer kilometres than indicated on the odometer which had been replaced. Indeed, so much was inferentially admitted by Mr. Stephens in conversations that he had with officers of the Trade Practices Commission.
The more substantive submissions of counsel on behalf of the defendant fell within the second category of his submission.
The first of these concerned the interpretation of the phrase "had a particular history" as used in s.53(a) of the Act. That section provides:

"A corporation shall not, in trade or commerce, in connexion with the supply or possible supply of goods or services or in connexion with the promotion by any means of the supply or use of goods or services -

(a) falsely represent that goods are of a particular standard, quality, grade, composition, style or model or have had a particular history or particular previous use; ..."

Counsel submitted that an indication on an odometer is not a representation that that vehicle has "had a particular history" for the purposes of this section. "History", it was said, is "the whole train of events connected with a thing". The submission was that the distance a vehicle has travelled is not the history of that vehicle, but merely a limited element of that vehicle's history. A representation as to distance is not, therefore, a representation that that vehicle had a particular history.
Reference was made to Given v. C.V. Holland (Holdings) Pty.Ltd. (1977) ATPR 40-029. In that case, Franki J. was dealing with facts quite similar to those in the present case. The motor vehicle there in question had been displayed for sale in the defendant's second-hand used car yard. The odometer showed a mileage of 23,700. However, it was subsequently established that the vehicle had travelled approximately 69,012 miles. Evidence was given on behalf of the defendant explaining the difference. The original speedometer had been replaced as it had not been functioning correctly. The replacement had been taken from a stock of second-hand speedometers.
His Honour held that the words "of a particular quality" in s.53(a) of the Act were apt to describe the number of miles a particular vehicle had travelled. He considered that the step of displaying the vehicle for sale in a used car dealer's yard with a mileage shown on the odometer amounted to a representation that the car had travelled the number of miles shown. That representation not being correct, his Honour concluded that the display of the odometer reading in those circumstances was a false representation that the vehicle was of a particular quality.
At the time of the dealings with which Franki J. was concerned, s.53(a) of the Act provided:-

"A corporation shall not, in trade or commerce, in connexion with the supply or possible supply of goods or services or in connexion with the promotion by any means of the supply or use of goods or services -

(a) falsely represent that goods or services are of a particular standard, quality or grade, or that goods are of a particular style or model; ..."

The allegation in Given was that the display of the odometer reading constituted a false representation that the vehicle was of a particular quality. In each of the informations with which I am concerned, the assertion is that such a display constitutes a representation that the vehicle had "had a particular history".
In my opinion, "history" is used in its primary sense as set out in the Shorter Oxford Dictionary. It is there said to mean "a relation of incidents".
There is no requirement that the catalogue of the past record of the vehicle be exhaustive or complete. A representation as to the distance travelled is a representation that a vehicle had a particular history. The word "particular" in s.53(a) of the Act is used, in my view, to highlight the element of the past record of the vehicle which is being represented. Its use is to focus attention on the attribute of the past record of that vehicle as contrasted with the generality of vehicles.
A representation as to the number of previous owners of the vehicle, the characteristics of any or all of such owners, or the geographical areas where the vehicle had seen service, would be a representation that the vehicle had had a particular history.
It is not difficult to appreciate that a particular instance of the past history of a vehicle would have an important bearing on its attractiveness to potential purchasers. Those aspects of its past record would generally be understood as being relevant indications of the condition of the vehicle in question. They are, of course, not determinative of any particular condition. In the Given case, Franki J. stated at p.17,386 that:-

"In my opinion the number of miles a particular vehicle has travelled describes a particular attribute, or a special feature of that vehicle, and therefore describes a particular quality of that vehicle."

With respect, that observation is generally true. However, it is not necessarily the case that the number of miles a vehicle has travelled is indicative of the quality of that particular vehicle. It may, therefore, be that that was one consideration relevant to the amendment of the formulation of the obligation required by s.53(a) of the Act.

For my part, I am satisfied beyond a reasonable doubt that a representation as to the distance a particular vehicle has travelled is a representation that that vehicle has had a particular history.
The second submission in the more substantive category of submissions on behalf of the defendant was that the displaying of a vehicle with an odometer reading shown was not a representation that that vehicle had travelled the number of kilometres shown on the odometer.
Counsel for the defendant submitted that a seller of used vehicles, when it acquires a vehicle as part of its stock, is not aware of whether the odometer in that vehicle had been previously replaced or tampered with by any earlier owner. Therefore, when that used car dealer displayed the vehicle with an odometer reading, it was not representing to any person inspecting the vehicle that it had travelled the distance shown on the odometer.
At p.17,386 of the judgment of Franki J. in the Given case, his Honour said:-

"I pass now to consider whether the reading on the odometer of a used motor vehicle is a representation of the miles that vehicle has travelled when that vehicle is displayed by a dealer in its used car yard. It was made clear by Senior Counsel for the informant that no verbal representation, or representation of any kind other than the mere appearance of the figures on the odometer was alleged. There was no suggestion that any officer of the company had drawn the attention of any customer to the odometer reading. However, the defendant had taken the step of placing the car on display for sale in its used car yard and the odometer reading was there for prospective purchasers to observe. I do not consider that any statement or assertion by a servant or agent of the company, with an intention to convey information to a prospective purchaser is necessary in this case. I consider that the step of placing the car on display for sale with a mileage shown on the odometer in a used car dealer's yard, where the vehicle is placed with the intention that it will be inspected by prospective purchasers is, in the absence of any special circumstances, a representation by the used car dealer that the car has travelled the number of miles shown on the odometer."

Whether the conduct by a used-car seller in displaying a vehicle for sale constitutes a representation as to the distance the vehicle has travelled is a question of fact. In my opinion, display without more of a vehicle showing a particular reading on the odometer is a representation by the person displaying that vehicle of the distance which the vehicle had travelled. I am of that view notwithstanding that the used car seller may not be aware of any earlier tampering with or replacement of the odometer of any vehicle which comes into his possession. There can be no doubt in my view that such a display is meant by the sales representative, and is certainly taken by the prospective purchaser, to be a representation as to the distance which the vehicle had travelled.
The word "odometer" is the modern spelling of "hodometer" and is defined by the Shorter Oxford Dictionary as:-

"An instrument attached to a wheeled vehicle, which records the distance traversed; also a wheel used by surveyors, having a recording apparatus in the centre and trundled along by a handle. Also applied to a pedometer."

As is generally understood, an odometer in a motor vehicle is an instrument by means of which the distance traversed is recorded. The purpose of such an instrument is plain - so as to afford information on inquiry as to the distance that that vehicle has travelled.
The circumstance of the sales representative's ignorance as to the precise history of the vehicle - in particular as to whether there has been any tampering with or replacement of the odometer and, therefore, as to whether the odometer accurately records the distance actually travelled by the vehicle, has to be considered in the context of the provisions of s.85 of the Act which provide certain defences. Section 85(1) and (2) provide:-

"(1) Subject to sub-section (2), in a prosecution under this Part in relation to a contravention of a provision of Part V, it is a defence if the defendant establishes -

(a) that the contravention in respect of which the proceeding was instituted was due to reasonable mistake;

(b) that the contravention in respect of which the proceeding was instituted was due to reasonable reliance on information supplied by another person; or

(c) that -

(i) the contravention in respect of which the proceeding was instituted was due to the act or default of another person, to an accident or to some other cause beyond the defendant's control; and

(ii)the defendant took reasonable precautions and exercised due diligence to avoid the contravention.

(2) If a defence provided by sub-section (1) involves an allegation that a contravention was due to reliance on information supplied by another person or to the act or default of another person, the defendant is not, without leave of the Court, entitled to rely on that defence unless he has, not later than 7 days before the day on which the hearing of the proceeding commences, served on the person by whom the proceeding was instituted a notice in writing giving such information that would identify or assist in the identification of the other person as was then in his possession."

The reading on an odometer is taken into account as a quite important consideration by prospective purchasers. I am satisfied then beyond a reasonable doubt that each of the elements of the two informations is made out. I convict the defendant in respect of both of those informations.

[1985] FCA 358

10 MAY 1985