Jones v West Star Motors Pty Ltd

[1995] QCA 498

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 9 of 1995

Brisbane

[Jones v. West Star Motors Pty. Ltd.]

BETWEEN:

RAYMOND DENNIS JONES

Appellant

AND:

WEST STAR MOTORS PTY LTD

Respondent

McPherson JA
Williams J

Mackenzie J

Judgment delivered 10/11/1995

Separate reasons for judgment of each member of the Court. All concurring as to the order to be made.

APPEAL DISMISSED WITH COSTS TO BE TAXED.

CATCHWORDS: TRADE PRACTICES - MISLEADING AND DECEPTIVE CONDUCT s.52 Trade Practices Act - purchase of second hand motor vehicle - representations by respondent's representative that defects would be fixed and that after sales problems would be rectified - whether misleading and deceptive.

TRADE PRACTICES - IMPLIED WARRANTY OF MERCHANTABLE QUALITY, s.71 - vehicle seven years old, travelled over 130,000 kilometres - engine defects - low compression - whether car in usable condition - whether defects in question would be revealed by examination.

PRACTICE - DISTRICT COURT ACT s.92 - appeal to Court of Appeal - test - whether evidence exists upon which the judge below might have reached the conclusion reached.

Counsel:	Mr. R. Lynch for the appellant Mr. W. L. Cochrane for the respondent
Solicitors:	Director of Public Prosecutions for the appellant Wonderley & Hall for the respondent
Hearing Date:	20 September 1995

IN THE COURT OF APPEAL

[1995] QCA 498

SUPREME COURT OF QUEENSLAND

Appeal No. 9 of 1995

Brisbane

Before McPherson J.A.
Williams J.
Mackenzie J.

[Jones v. West-Star Motors Pty. Ltd.]

BETWEEN

RAYMOND DENNIS JONES

(Respondent) Appellant

AND

WEST-STAR MOTORS PTY. LTD.

(Appellant) Respondent

REASONS FOR JUDGMENT - McPHERSON J.A.

Judgment delivered the 10th day of November 1995

I have read and agree with the reasons for judgment of Mackenzie J. on this appeal.

Like his Honour I consider that the plaintiff failed to make out a case that there was a

breach of the condition of merchantibility implied by s.71 of the Trade Practices Act 1974

(Cth.) Many of the defects were apparent or would have been revealed on the inspection

of the vehicle, even allowing for the fact that the engine was out of it at the time.

The same cannot necessarily be said of the poor compression ratio of the car when

it was delivered to the plaintiff. On the other hand, there was evidence that the

compression was within the limits of the manufacturer's specifications. In that respect, the

vehicle was not in such a condition, having regard to its age and the fact that it had logged 130,000 km., as to require a conclusion that it was not of merchantable quality. In Bartlett

v. Sidney Marcus Ltd. [1965] 1 W.L.R. 1013, 1016, Lord Denning M.A. said that, on the

sale of a second-hand car, it was merchantable if it was in usable condition, even though

not perfect. That statement was adopted by Pincus J. in Atkinson v. Hastings Deering

(Queensland) Pty. Ltd. (1985) 71 A.L.R. 93, 98. In the present case the car was far from

perfect; but it was in usable condition. The plaintiff drove it for some 3,000 kms. before

deciding to lock it away pending litigation. Its condition would scarcely have improved in

the interval leading up to trial.

On this point, however, the major difficulty now confronting the plaintiff is that this is

an appeal from a decision in the District Court, which in turn was given on an appeal from

the magistrates court in its civil jurisdiction, whereby the decision in that court was

reversed. Under s.92(3) of the District Courts Act 1967 an appeal to this Court is an

appeal by way of rehearing if one or more of the conditions in paras.(a), (b), or (c) of

s.92(3) are satisfied, but only if the appeal is from a judgment of the District Court in its

original jurisdiction. This is not so here because the judgment below was given by the

District Court in the exercise of its appellate jurisdiction under s.95(2) of the Act. In

addition, the claim in the action was for less than the amount of $20,000 specified in

s.92(3)(a). In relation to an appeal from a decision like that, the powers of this Court are

circumscribed by s.93(1) of the District Courts Act, as follows:

"93 (1) On the hearing of an appeal the Court of Appeal shall have power to draw inferences of fact from facts found by the Judge or jury, or from admitted facts or facts not disputed provided that where the appeal is not by way of rehearing such inferences shall not be inconsistent with the findings of the Judge or jury."

The limits of the power to draw inferences "not inconsistent with" findings made by

the judge below were defined by Williams A.C.J. in Smith v. McKeough (1953) 89 C.L.R.

520, 526-527, referring with approval to what was said by Starke J. in Baird v. Magnipilis

(1925) 37 C.L.R. 321, 334:

"the court clearly has jurisdiction to set aside the verdict of a jury which is unreasonable or perverse, and if a verdict is set aside and no longer exists, then it seems to me that the authority to draw inferences of fact under the Rules may be exercised ... But that authority will only be exerted where the evidence is such that only one possible verdict could reasonably be given on the evidence: it is a strong power and must be exercised with considerable caution."

The effect is to take matters back to the position as it used to be generally in the case of

appeals under The District Courts Act of 1958 from a judge sitting alone, and which,

incidentally, continues to prevail in the case of an appeal in an action not falling within

s.92(3)(a) of the District Courts Act 1967. Under that regime, the function of this Court on

appeal is, as was explained by Gibbs J. in Clark v. Trevilyan [1963] Q.W.N. 11, limited to

seeing, first, whether there is any evidence in support of the findings; and, secondly,

whether the finding can be set aside as being against the weight of evidence and

unreasonable within the meaning of the authorities discussed by Dixon J. in Hocking v.

Bell (1945) 71 C.L.R. 430, at 497-499. See also Aspasia Pty. Ltd. v. Huntress [1985] 2

Qd.R. 241, 242, which was an instance specifically affected by s.92(3)(a) of the Act of

1967.

In the present case, therefore, we can draw inferences inconsistent with the findings

of the District Court judge only if there was no evidence on which he could make the finding

that the vehicle was merchantable, or if such a finding was unreasonable. As to that, it is

enough to say that there plainly was and is evidence capable of supporting such a finding, and the finding as such is not unreasonable. It was therefore open to the learned judge to

hold that a breach of s.71 of the Trade Practices Act was not established.

Much the same is true of the complaint based on s.52 of the Trade Practices Act,

which relied on the statement by Mr Boddington on behalf of the defendant that anything

wrong with the car would be rectified. It was made on 25 January 1988 which was after the

contract was entered into on 22 January 1988. On the authority of Gurdag v. B.S. Stillwell

Ford Pty. Ltd. (1985) 8 F.C.R. 526, it was submitted that, even though the statement in

question could not be said to have induced the contract, it had persuaded the plaintiff to

continue with it. But, there is no finding to that effect in the court below, and the evidence

relied on in support of it is ambiguous. The plaintiff said he would not have bought the car

had he not been promised that it would be brought to good condition. However, it is not

clear from this that he was not referring to something that was said on 22 January 1988 and

not to Boddington's statement on 25 January.

Gurdag's case, is, in any event, distinguishable in that there the buyer entered into

contract in reliance on the fact that a final check of the vehicle was to be carried out, and he

would have withdrawn from the transaction if that check had revealed serious defects. It was

acknowledged in evidence that that was a condition of the contract, and that the buyer would

in fact have been permitted to withdraw (8 F.C.R. 526, 530). In Gurdag the buyer succeeded

because there were pre-contractual representations that the vehicle was reliable, roadworthy

and suitable for interstate transport; that the engine was reliable; and the brakes, lights,

suspension and chassis were "O.K.". These representations were found to be false (8 F.C.R.

526, 533), and to amount to misleading and deceptive conduct under s.52. By contrast, in the

present case the other pre-contractual statements on which the plaintiff relied were promissory

in form and related to future action by the defendant. They could perhaps have amounted to

express warranties, but that issue was neither pleaded nor litigated at the trial. For present

purposes they can have constituted misleading or deceptive conduct only if, as Mr Lynch of

counsel conceded, they were shown to have been made recklessly. There is no evidence that

they were, and no finding to that effect.

On the question of admissibility or weight of the certificate of roadworthiness, I agree

with what has been written by Mackenzie J.

I consider that the appeal must be dismissed with costs.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 9 of 1995

Brisbane

Before McPherson JA

Williams J

Mackenzie J

[Jones v. West-Star Motors Pty Ltd]

BETWEEN:

RAYMOND DENNIS JONES

(Respondent) Appellant

AND:

WEST-STAR MOTORS PTY LTD

(Appellant) Respondent

REASONS FOR JUDGMENT - GN WILLIAMS J

Judgment delivered 10/11/1995

I have read the reasons for judgment prepared by both McPherson JA and Mackenzie J and I agree with all that each has said. The orders should be as indicated in the reasons of Mackenzie J.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 9 of 1995

Before McPherson JA
Williams J
Mackenzie J

[Jones v. West Star Motors Pty Ltd]

BETWEEN:

RAYMOND DENNIS JONES

Appellant

AND:

WEST STAR MOTORS PTY LTD

Respondent

JUDGMENT - MACKENZIE J.

Judgment Delivered 10 November 1995

The appellant was the plaintiff in an action brought in the Magistrates Court, Ipswich against Kevin

Edward London and the respondent, West Star Motors Pty Ltd in connection with the purchase by the

appellant of a second hand Mercedes Benz sedan. The Stipendiary Magistrate at Ipswich gave judgment

for the plaintiff against both defendants in the sum of $10,000, interest, and costs.

West Star Motors Pty Ltd ("West Star") appealed against the Magistrate's decision and on 16

December 1994 the appeal was allowed by a District Court Judge. Judgment was entered for West Star

Motors Pty Ltd. The unsuccessful plaintiff has now appealed to this court. The appeal lies as of right under

s.92 of the District Court Act 1967 having regard to the amount claimed in the action. The facts are that in December 1987 the appellant was interested in purchasing a 300D Mercedes, white in colour and

preferably automatic. He contacted Mr Boddington, an employee of the respondent which retails

Mercedes Benz in Toowoomba and after explaining what his requirements were, Mr Boddington said that

the respondent had the ability to find a vehicle anywhere in Australia. On 22 January 1988, Mr

Boddington phoned the appellant to advise that he had found an ex-consulate vehicle, about which the

respondent's representative, London, would be contacting the appellant from Brisbane. London had a

standing arrangement with the respondent and its director, John Gribben, who was deceased by the time

of trial, to sell cars on consignment for the respondent. There was a finding that London was the agent of

the respondent during the transaction, which is not challenged in these proceedings. The appellant went with

London to a workshop in Fortitude Valley to inspect the vehicle on 22 January 1988. At the time the

vehicle was inspected, the engine was largely dismantled. However, the applicant observed a number of

defects which he noted. After London and the appellant left the premises at Fortitude Valley, London

phoned Gribben on his mobile phone. Gribben and the appellant discussed the defects and Gribben told

him that they would be repaired.

The appellant subsequently on the same day reduced the list of repairs to be done to writing and gave

it to London. A price of $32,950 had previously been negotiated and a deposit of $5,950 was handed to

London at about the time when the list of defects was given to him. On 25 January 1988 the appellant

phoned Boddington and advised him of some other defects which he had remembered. The appellant gave

evidence that Boddington said that West Star would make sure that any defects were repaired.

On 3 February 1988 the vehicle was delivered to the appellant by London. The balance of purchase

price after allowing for a trade-in was handed to London in the form of a cheque. The appellant asked

London if the defects were all fixed and was told that they were. He was told by London, according to his

evidence, that if he found any further defects to ring Mr Gribben and to take the car to West Star. On 4 February 1988 the appellant conducted a detailed examination of the vehicle and found a number of matters

which were not to his satisfaction. He drew these to the attention of the respondent and attempted to have

them fixed. According to his evidence, Gribben said to him that the car had not been sold to him by the

respondent, and the repairs were never done by West Star.

It was conceded that the case against the respondent was pleaded solely under the Trade Practices

Act. It was alleged that there had been a contravention of s.52 by the respondent making false

representations that the vehicle was in good condition, that any defects would be fixed by the respondent

prior to delivery to the plaintiff, and that any after sales problems would be rectified by the respondent.

There was another ground relating to the absence of a compliance plate but that was not pursued as a

separate issue on the appeal to this court. It was also alleged that the implied warranty in s.71 of the Trade

Practices Act had been breached because the vehicle was not of merchantable quality by reason of a large

number of particularised defects. The case was not conducted on the basis that there had been an express

warranty that any defects which were found to exist would be repaired. The pleadings do not include any

allegation based upon breach of an express warranty.

The District Court Judge appreciated that there was a definition of merchantable quality in s.66 of

the Act and that s.71(1)(b) excluded the implied warranty as regards defects which the examination ought

to reveal in cases where the consumer examined the goods before the contract was made. He concluded

that some of the defects relied on were not matters which affected the merchantability of the vehicle. He

also concluded that the warranty was excluded in respect of the items contained in the list given to London

on the occasion when the deposit was handed to him because the inspection had actually revealed them.

The District Court Judge also found that a number of the other defects were ones which the examination

ought to have revealed.

The District Court Judge accepted that the scope of the examination by the appellant did not extend

to the internal parts of the engine. With respect to the condition of the engine he said that the appellant had

given "no evidence worth relying on with respect to the mechanical condition of the vehicle at the time he

took delivery or at a time shortly thereafter." He noted that the inspection upon which the claim of engine

defects rendering the vehicle of unmerchantable quality was based occurred some three years later. He

concluded that the effect of the evidence of the condition of the engine given by the service manager who

compiled the list of mechanical repairs and their costs was that while he would not expect, at 130,000km,

the compression to be as low as it was, it did occasionally happen. The District Court Judge also referred

to the exercise as one to cost the "worst possible scenario and, more significantly, recondition the vehicle

to 'as new condition'".

The District Court Judge said the respondent was purchasing a vehicle some seven years old which

had travelled over 130,000km and which showed signs, which the appellant had noticed on inspection, of

having had "a pretty hard life". The compression was low but within manufacturer's specifications. He

concluded that, given the absence of any timely complaint by the appellant as to the engine compression and

the fact that the compression ratio was low but "not unusual", the state of the engine should not of itself be

sufficient to render such a vehicle to be of "unmerchantable quality". He also concluded that it had not been

proven on the balance of probabilities that condition of the gear box was, at the time of the contract, such

that the vehicle was not of merchantable quality. On an appeal under s.92 the test is whether there

was evidence upon which the judge below might have reached his conclusions. The findings can be set aside

only if there is no evidence, or if the findings are such that no reasonable tribunal of fact might have made

them. So far as the implied warranty of merchantability is concerned the District Court Judge correctly

concluded that those matters listed at the time the deposit was paid were to be excluded. With respect to

other matters he concluded that they ought to have been found upon the inspection made. That conclusion was open to him. In respect of several other matters he concluded that they did not go to merchantability.

That was also a conclusion open to him.

With respect to the remainder of the matters the major complaints were in connection with the

condition of the engine and the gear box. The conclusion that the plaintiff had not discharged the onus of

proving that the gear box was in the condition in which it was ultimately believed to be was open to him on

the evidence, having regard to, amongst other things, the fact that the vehicle had been driven for some

3,000km after it was purchased by the appellant. So far as the condition of the motor is concerned, the

District Court Judge based his conclusion on the fact that there was no timely complaint about the state of

the engine and the evidence that while the compression was at the very low end of the scale it was still within

manufacturer's specifications. He also drew attention to the mileage of the car and the appellant's

knowledge of signs of considerable wear and tear. There was in my view evidence on which the District

Court Judge could find that the appellant had not made out a case of breach of an implied warranty of

merchantability.

In relation to the breach of s.52, the District Court Judge found that there had been no specific

representation that the vehicle was in good condition. With respect to the allegation that there had been a

false representation that any defects would be fixed prior to delivery he concluded that the claim was wider

than the evidence established. He drew attention to the fact that attempts had been made to fix a number

of the particularised defects and observed that if the appellant was dissatisfied with that work, that did not

demonstrate of itself that there was any deceptive or misleading representation.

In the District Court Judge's judgment the following quotation records the conversation on 25 January

1988 when the appellant rang Mr Boddington to add further items to the list:-

"We'll go right through it and repair any defects ... give it a 100% work over ... We will rectify
anything we find wrong with the car."
This passage collects into one quotation the evidence given by the appellant in several consecutive

answers about the conversation. In particular, the last sentence, according to the transcript, was what the

appellant recorded in notes compiled contemporaneously by him of relevant events. Presumably it reflects

his authentic recollection of what was said. I make that observation because later in his evidence there was

cross-examination touching upon the warranty to repair. The highest position contended for is in the

following passage:-

"Who made that representation to you that they'd rectify some wider list than Exhibit 10? -- No-one physically said that they would fix anything on any list that I made, except - I assumed that everything on the list would be done by Westar's representative saying that they would fix anything that they find wrong with it or anything that I find wrong with it.

You mean some sort of warranty? -- Verbal warranty.

An oral warranty? -- Yes.

To fix anything that was wrong with it? -- That I found or they found in addition.

I see, anything that you found and anything that they found in addition and where they overlapped the greater of them, is that what you mean? -- That's right."

The element of assumption on the part of the appellant is apparent on the face of the quotation. The

District Court Judge said that if the conversation was that referred to in the first quotation above "it was a

promise to attend to any other matter which in (West Star's) opinion were wrong. So there was room for

a difference of opinion. I see no deception or misleading statement in that." It was open to him in my view

to make that finding as to the extent of the representation made and to place that interpretation on it. The

District Court Judge also said with respect to the addition of further defects to the list that the undertaking

was post-contract and could not be conduct leading the appellant to have made the contract to purchase.

Mr Lynch submitted that a contravention of s.52 had occurred because the appellant had been

induced by Mr Boddington's deceptive or misleading representation, made between payment of the

deposit and payment of the balance, that additional defects would be rectified if found. He relied on Gurdag v. B. Stillwell Ford Pty Ltd (1985) 8 FCR 526, as authority for the proposition. In that case,

there had been a representation that a commercial vehicle was in good condition. Foster J. held that

it was a condition of the original contract that a final inspection would be made by the vendor before

delivery. The representation that the vehicle was in good condition, which proved to be false, not only

was not corrected upon the inspection being made but was reinforced by a report of the inspection

given to the purchaser at the time the purchase price was paid.

The particular passage relied on by Mr Lynch in Foster J.'s judgement is to the effect that the

representations made in the inspection report "induced Gurdag to continue with the contract even if they

may not properly be regarded as inducing him to enter into it." In my view, the remarks relied on must

be read in the context of the finding of the nature of the contract. In any event, it is a consequence of

the primary finding in this case as to the nature of the representation and that it was not deceptive or

misleading that the principle contended for cannot have any application on the facts.

The District Court Judge then found that other representations relied on had not been made out.

There was clearly a basis for him to make those findings. In my opinion, the grounds of appeal insofar

as they relate to breach of s.52 of the Trade Practices Act have not been made out.

There was a separate ground to the effect that impermissible use had been made of a roadworthy

certificate. The certificate had been tendered as one of the documents given to the appellant by London

on 3 February 1988. The maker of the certificate was not called by any party. It was argued that the

trial judge led himself into error by using the certificate as evidence that on 24 January 1988 the

approved examiner considered that there was no defect that would affect the safe use of the vehicle on

a road. The appellant had in his evidence described the certificate as "a fake" because the seat belts

were inoperative when the certificate was issued.

The appellant submitted that the only purpose for which the document was tendered was as part

of the relevant documentation received. Once the appellant had put the document in evidence, it was

open to the trial judge to give it such weight as he thought proper (Walker v. Walker (1937) 57 CLR

630). The limited purpose for which he used it did not exceed the proper limits of such evidence.

As none of underlying propositions of the appeal have been established the appeal should be

dismissed with costs to be taxed.