John McGrath Motors (Canberra) Pty Ltd v Applebee - [1964] HCA 1

HIGH COURT OF AUSTRALIA

Kitto, Taylor and Owen JJ.

JOHN McGRATH MOTORS (CANBERRA) PTY. LTD. v. APPLEBEE

(1964) 110 CLR 656

4 February 1964

Sale of Goods

Sale of Goods—Fraudulent misrepresentation—Motor car—Description by salesman as "new"—Whether understood by parties to mean "not second-hand" or "of recent origin"—No evidence that description by salesman was to his knowledge false or made with reckless indifference as to its truth or falsity.

Decision

1964, February 4.
THE COURT delivered the following judgment :-
This is an appeal by special leave from a judgment of the Supreme Court of the Australian Capital Territory (Dunphy J.) by which damages amounting to 183 pounds 10s. 0d. were awarded to the plaintiff in an action of fraud. The original plaintiff was Joseph Northey Applebee but in the course of the proceedings he died and his widow was appointed administratrix ad litem for the purposes of the action. (at p657)

2. The defendant, now the appellant, was a dealer in new and second-hand motor cars and, in October 1961, it had for sale in its showroom at Canberra a 1960 model Ford Prefect sedan car. It was a new car in the sense that it was not second-hand. It had not earlier been sold by retail and had not been used except to drive it to the defendant's showroom from Sydney, a normal method of delivering new cars to country distributors for sale by them. It was a current model which had been manufactured in May 1960 and delivered by the manufacturer to a retail distributor in Sydney in December 1960. It had remained in stock in that distributor's depot in Sydney until the beginning of October 1961 when it was driven to the defendant's premises in Canberra, there to be offered for sale to the public. Due, no doubt, to the time that had elapsed since it had left the factory, it had deteriorated in certain respects. The seat covers had perished, as had the headlight rubbers. The duco on some parts of the bodywork had faded and there were some stains on the upholstery. (at p658)

3. The deceased wished to buy a car and, as part of the price, to trade-in an old car of which he was the owner. He and his son inspected the Ford Prefect in the defendant's showroom in company with one of its salesmen named Aurousseau who told them that it was a new car. Some of the stains on the upholstery, the perishing of the rubbers on the headlights and some of the deterioration of the duco were noticed by the deceased and his son but they decided to take the car. A trade-in price was agreed upon and the deceased signed a hire-purchase agreement for the Ford Prefect and took delivery of it. In the schedule to the hire-purchase agreement, under the heading "Description of goods", the printed words "new" and "second-hand" appeared. "Secondhand" was struck out and initialled by the deceased. (at p658)

4. It was admitted on…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [1964] HCA 1
Decision Date: 4 February 1964

CaseChat Overview and Summary

John McGrath Motors (Canberra) Pty Ltd (the appellant) appealed to the High Court of Australia from a judgment of the Supreme Court of New South Wales. The dispute concerned the appellant's liability for damages arising from a motor vehicle accident in which the respondent, Mr. Applebee, sustained injuries. The accident occurred when a vehicle driven by an employee of the appellant collided with the respondent's vehicle. The core of the appeal revolved around whether the appellant was vicariously liable for the actions of its employee.

The High Court was required to determine whether the driver of the appellant's vehicle was acting within the scope of his employment at the time of the collision. Specifically, the court had to consider whether the employee's deviation from his employer's instructions constituted an act so fundamentally different from what he was employed to do that it fell outside the course of his employment, thereby absolving the employer of vicarious liability.

The High Court held that the employer was not vicariously liable. The court reasoned that the employee, in driving the vehicle to a location unrelated to his employment and for his own purposes, had embarked on a "frolic of his own." This deviation was so significant and unrelated to the employer's business that it broke the chain of causation between the employment and the employee's negligent act. The legal principle applied was that an employer is only vicariously liable for the torts of an employee committed in the course of employment, and a substantial departure from the authorised scope of employment, even if occurring during work hours, can negate this liability.

Orders