Lasting Impressions Home Renovations Pty Ltd v Felder NSW Pty Ltd - [2024] WADC 33

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION:   PERTH
CITATION:   LASTING IMPRESSIONS HOME RENOVATIONS PTY LTD -v- FELDER NSW PTY LTD [2024] WADC 33
CORAM:   LONSDALE DCJ
HEARD:   13 - 16 NOVEMBER 2023
DELIVERED          :   17 MAY 2024
FILE NO/S:   CIV 5138 of 2022
BETWEEN:   LASTING IMPRESSIONS HOME RENOVATIONS PTY LTD
Plaintiff
AND
FELDER NSW PTY LTD
First Defendant
K R ENGINEERING (WA) PTY LTD
Second Defendant
CORNELIUS JACOBUS JOHANNES BADENHORST
Third Defendant

Catchwords:

Misleading and deceptive conduct - Australian Consumer Law - Damages - Section 236 Australian Consumer Law - Section 237 and s 243 Australian Consumer Law

Legislation:

Australian Consumer Law (Cth), s 18, s 236, s 237, s 243

Result:

Judgment for the plaintiff
Damages awarded pursuant to s 236 of the Australian Consumer Law
Order made for return of F400 machine to the second defendant

Representation:

Counsel:

Plaintiff	:	Mr P G McGowan
First Defendant	:	Mr J Johnstone
Second Defendant	:	Mr J Johnstone
Third Defendant	:	Mr J Johnstone

Solicitors:

Plaintiff	:	Smart Legal WA
First Defendant	:	Kotze Law
Second Defendant	:	Kotze Law
Third Defendant	:	Kotze Law

Case(s) referred to in decision(s):

Alati v Kruger (1955) 94 CLR 216
Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1988) 39 FCR 546
Henville v Walker [2001] HCA 52; (2001) 206 CLR 459; (2001) 182 ALR 37; (2001) 75 ALJR 1410; [2001] ATPR 41-841
HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd [2004] HCA 54; (2004) 217 CLR 640
Jonval Builders Pty Ltd v Commissioner for Fair Trading (NSW) (2020) 104 NSWLR 1
Metz Holdings Pty Ltd v Simmac Pty Ltd (No 2) [2011] FCA 981
Munchies Management Pty Ltd v Belperio (1988) 58 FCR 274
Nea Pty Ltd v Magenta Mining Pty Ltd [2007] WASCA 70
Re Bonney Forge Pty Ltd v Press & Shear Machinery Pty Ltd [1988] FCA 121
Sanrod Pty Ltd v Dainford Ltd (1984) 54 ALR 179
Tenji v Henneberry & Associates Pty Ltd (2000) 98 FCR 324
Wyzenbeek v Australasian Marine Imports Pty Ltd (in liq) [2019] FCAFC 167; (2019) 272 FCR 373

LONSDALE DCJ:

Introduction and overview

Ruan du Plessis (Mr du Plessis) is the sole director and shareholder of the plaintiff company Lasting Impressions Home Renovations Pty Ltd. As its names suggests, the plaintiff company is in the business of home renovations. The plaintiff company manufactures cabinetry and joinery for kitchens, bathrooms, laundries, cupboards and desks using specialised machinery. One such machine is known as an edgebanding machine, the function of which is to place 'tape' on the sides of customised pieces of board for use in the manufacture of cabinetry.
In 2022 Mr du Plessis entered into negotiations with the third defendant (Cornelius Badenhorst) for the purchase of an edgebanding machine from the second defendant.[1] On 7 June 2022 Mr du Plessis accepted the second defendant's written quote for an F400 Felder Edgebanding Machine Tempora Edger 'F45.03LX' (the F400 machine).
[1] Mr Badenhorst is the director and proprietor of the first and second defendants. The second defendant is a wholly owned subsidiary of the first defendant.
Mr du Plessis claims that he purchased the F400 machine in reliance on representations made by the defendants that it was able to perform certain functions without the need for manual intervention. Those functions included the processing of pieces with sharp angles and pieces containing hinge holes.
The plaintiff claims that the F400 machine has never operated as the defendants had suggested it would. The plaintiff submits that representations made by the defendants that the F400 machine was able to process pieces with sharp angles and pieces containing hinge holes without manual intervention - were misleading and deceptive and in breach of s 18 of the Australian Consumer Law (Cth) (ACL).[2]
[2] Section 18 of the ACL is the equivalent of s 52 of the former Trade Practices Act 1974 (Cth).
The plaintiff seeks relief in the form of recission of the contract of sale. The plaintiff claims that the defendants misrepresented that the F400 machine was capable of processing workpieces with hinge bores and having a 'nesting pack' for the finishing of workpieces when the F400 machine did not. Alternatively, the plaintiff claims breach of contract because the spraying unit for lubrication agent for a smooth finish on edge surfaces was contained in the written offer, was not supplied.
The plaintiff seeks return of the purchase price of $93,720, return of the F400 machine and damages pursuant to s 236, s 237 and s 243 of the ACL.

The plaintiff's pleaded case

In the plaintiff's amended statement of claim filed on 29 September 2023 the plaintiff pleads that the defendants' misleading and deceptive conduct is as set out in [9] ‑ [14]:
9.On or about April or May 2022 the Plaintiff by its sole director and shareholder Mr Ruan Du Plessis attended the business premises of the Second Defendant and viewed the Edgebanding machines.
10.On or about the end of May 2022 Mr Ruan Du Plessis of the Plaintiff attended the business premises of the Second Defendant and Third defendant when Mr Conrad [sic] Badenhorst the Third Defendant represented to Ruan Du Plessis that the F400 Felder Edgebander[3] can do work pieces with hinge bores and do exactly the same as the plaintiff's current machine a Biesse Akron 440 that has a Nesting Package. (Nesting Representation)
[3] The reference to 'F400' is a reference to the Edgebanding Machine Tempora 45.03 LX being the machine the subject of this action.
11.In reliance on the Nesting Representation Ruan Du Plessis on behalf of the plaintiff then looked at the First Defendant's alternatively the Second Defendant's website and in the product description on the Website is clearly indicated that the F400 Tempora Edgebanding machine has a 'Nesting' Package that also states that '…The 'Nesting' Package optimizes the processing of workpieces with hinge borings or surfaces with acute angles'. (Web Representation)
12.On or about 7 June 2022 the First Defendant by the Third Defendant alternatively the Second Defendant (K R Engineering) by the Third Defendant issued an Offer (Contract) to the Plaintiff for the sale of an [sic] Tempora Edger - Edgebanding Machine Tempora 45.03LX (the Goods), at $93,720.00 which Offer was accepted by the Plaintiff.
Particulars
The offer was made to the Plaintiff on an offer form of the 'Felder Group Australia' with number 21-0144/10, Customer number YAOAL 'Your rep' Con Badenhorst F400 Smaller Tempora Edger dated 7 June 2022 with headings 'Standard Equipment' and 'Included additional Items' and 'Accessories and Services' with a total selling price of $93,720.00 including GST.
13.By way of specification in the wording under: -
(A)item 51 of the Offer under 'Included additional items…Multi‑functional trimming unit with vertical reference rollers for the processing of workpieces with hinge bores (#64) Allows the processing of workpieces with hinge bores/rear panel grooves as well as sharp angled workpieces…' and included a photograph of the 'Nesting' Package as also referenced and depicted on the First Defendant's alternatively Second Defendant's website under F400 Details.; and
(B)item 53 of the Offer under 'Included additional items…Spraying unit for lubrication agent. For a smooth finish of delicate edge surfaces…'; are not installed on the Edgebander / Goods. (Offer Representation)
14.The acceptance of the offer and the entry into the contract for the purchase of the Goods by the Plaintiff was in reliance on each of the Nesting Representation, Web Representation and Offer Representation.

The defendants' pleaded case

The defendants have conceded that the spraying unit for the lubrication agent was not supplied with the F400 machine but contends, that at all material times, they were willing to supply the unit up until the plaintiff sought to rescind the contract some months after the machine was delivered.
However, the defendants deny that it made misleading or deceptive representations concerning the functionality of the F400 machine supplied. By an amended defence filed on 27 October 2023 the defendants admit having made certain representations but denies that they were misleading, deceptive, or likely to mislead or deceive.
The defendants contend that they offered to sell the plaintiff the F400 machine, having advised the plaintiff that this machine contained a nesting package that was only on the 'multi‑functional trimming unit'. The defendants deny having told the plaintiff that the F400 machine contained a nesting package operating on other components of the machine and, in particular, the radius and glue scrapers.
The defence is pleaded in pars 11 and 12 of the defendants' amended defence:
11.As to paragraph 11 of the Plaintiff's Statement of Claim the First Defendant:
a)Says that the Nesting package on the Tempora F400 is on the multifunction trimming units only; and
b)The Plaintiff was advised on 7 June 2022 by e-mail stating 'The F400 has nesting installed on the multifunction top and bottom trimmer unit (3 rollers so it doesn't dip into the hinge bores).
If you wanted the F600 as per the last quote, I have one being built later, but this will be end of year as we don't overpromise anything with the current global issues.; and
c)Item number 51, the multi-functional trimming unit with vertical reference rollers for the processing of workpieces with hinge bores referenced to item 64 as specified in the quotations was supplied. The item as specified is currently in the machine; and
d)The pneumatic gate is on the machine and prevents the premature feeding of workpieces by a pneumatic acting as a gate which is option 64; and
e)Option 51 is installed on the multi-functional trimmer unit as per the offer; and
f)Otherwise, denies each and every allegation contained in that paragraph.
12.As to paragraph 12 of the Plaintiff's Statement of Claim the First Defendant:
a)Says that on 7 June 2022, the First Defendant and the Second Defendant (K R Engineering) issued an Offer (Contract) to the Plaintiff for the sale of a Tempora Edger - Edgebanding Machine Tempora 45.03LX (the Goods), at $93,720.00 which Offer was accepted by the Plaintiff; and
b)Admits the offer was made to the Plaintiff on an offer form of the 'Felder Group Australia' with number 21‑0144/10, Customer number YAOAL 'Your rep' Con Badenhorst F400 Smaller Tempora Edger dated 7 June 2022 with headings 'Standard Equipment' and 'Included additional Items' and 'Accessories and Services' with a total selling price of $93,720.00 including GST; and
c)Otherwise, denies each and every allegation contained in that paragraph.

The issues for determination

At the heart of the issues in this case is the question of whether the defendants breached the ACL by making representations about the functionality of the F400 machine which were misleading or deceptive or likely to mislead or deceive and if so, whether the plaintiff acted in reliance on these representations.
The issues for my determination therefore are:
•Has the plaintiff proved that the defendants made any of the representations pleaded - namely, either the 'nesting representation', the 'web representation' or the 'offer representation'?
•Insofar as I find that those representations were made, were they misleading and deceptive or likely to mislead or deceive?
•If I find that the defendants did make misleading or deceptive representations, has the plaintiff established that he relied on those representations?
•What is the appropriate remedy having regard to the unwritten law or the provisions of the ACL?

Background to the plaintiff's decision to purchase the F400 machine and overview of the plaintiff's case

At all relevant times prior to purchasing the F400 machine, the plaintiff company employed a robot to cut workpieces for the construction of cabinetry. After the pieces were cut to specification by the robot, they would be placed in an edgebanding machine which would apply edgebanding tape on the raw edges of the pieces. Each piece, depending on its function, would require tape on between one and four edges. For example, a door piece would require four edges whereas a piece of shelving may only require one. From 2010 until the plaintiff purchased the F400 machine, the plaintiff used a Biesse Akron 440 edgebanding machine (the Biesse machine) to perform this function.[4]
[4] ts 53.
The process of edgebanding performed by the Biesse machine was quite sophisticated: it was able to perform several functions obviating the need for extensive manual handling of the pieces. The Biesse machine's process involved several stages. First, it would remove approximately 1 mm of wood from the pieces (to accommodate the thickness of the edgebanding). It would then apply glue to the sides of the pieces after which edgebanding would be applied. The machine's trimmers would then lop the edgebanding according to the thickness of the piece leaving a small lip standing 'proud' above the edge of the piece. The last two 'finishing' functions were then performed by parts of the machine termed the 'radius scraper' and the 'flat' or 'glue scraper'. (To avoid confusion, I will use the term 'glue scraper' rather than 'flat scraper'.)
The function of the 'radius scraper' was to remove any excess edgebanding tape sitting 'proud' and to create rounded edges on pieces where sharp corners are not desirable (such as for doors). The function of the 'glue scraper' was to remove any excess glue from the pieces.
According to Mr du Plessis, the plaintiff's Biesse machine performed all of these functions well. However, the Biesse machine was nearing the end of its useful life. (When Mr du Plessis had purchased the Biesse machine 7 years earlier, it was already 18 years old.)
In 2021 Mr du Plessis commenced making enquiries for the purchase of a new edgebanding machine to replace the ageing Biesse machine. It was not until 2022, however, that Mr du Plessis finally decided to replace the Biesse machine with a new edgebanding machine.
It was important to Mr du Plessis that the replacement machine be able to replicate the functions of the Biesse machine.
Of particular importance to Mr du Plessis was that the machine should be able to process workpieces with hinge borings, such as for doors, or pieces with acute angles without the need for the workpieces to be finished manually.
Mr du Plessis knew that for such pieces to be processed, the machine would need to have what has been referred to as a 'nesting package'. A nesting package on an edgebanding machine is, in simple terms, a device which prevents damage to workpieces as they are processed. It typically contains a series of rollers that create a 'nest' as a piece of board passes through the machine, preventing elements of the machine damaging the pieces.
Mr du Plessis says that he purchased the F400 machine from the second defendant in reliance on representation that the machine would have a nesting package which would ensure that it could process pieces (including with hinge holes and acute angles) without manual intervention.
The plaintiff contends that he was misled or deceived by a combination of Mr Badenhorst's oral representations, the terms of the written offer prepared by Mr Badenhorst and by claims made on the Felder website.

Problems with the F400 machine

The day after delivery and installation of the F400 machine, Mr du Plessis began to experience problems with the processing of workpieces.
Mr du Plessis complained to Mr Badenhorst that the F400 machine was cutting pieces 'out of square' and causing damage to them. Mr Badenhorst tried to rectify the problems himself but was unsuccessful.
Sometime later, a technician employed by the first and second defendants was called to fix the problems. The technician was able to fix the problems in part. However, problems with the processing of pieces containing hinge holes or acute-angled pieces remained.
It eventually dawned on Mr du Plessis, after a series of unsatisfactory dealings with the defendants, that the F400 machine did not in fact have a nesting package operating on certain processes of the machine. Therefore, in order to prevent damage to the workpieces it had been necessary for Mr du Plessis' workers to disengage both the radius and glue scrapers. The consequence of the disengagement of the radius and glue scrapers was that the pieces had to be finished manually. This required the plaintiff to employ many additional labour hours in order to finish the pieces.
After several attempts on the part of the defendants to rectify the problem, the plaintiff sought recission of the contract. The defendants refused to accept recission and denied that the plaintiff had not received the machine it had ordered.

Evidence of representations made by the defendants

Mr du Plessis gave evidence in the case for the plaintiff that he had purchased the F400 machine in reliance on representations made by the defendants. The plaintiffs tendered various documents in support of the plaintiff's version of events, including email correspondence between Mr du Plessis and Mr Badenhorst, various written quotes and extracts of promotional material on the Felder website.
Mr du Plessis first contacted the second defendant to enquire about the purchase of an edgebanding machine sometime in October 2021.
On 19 October 2021 Mr Badenhorst responded to Mr du Plessis' inquiry in an email which attached links to the Felder website for two edgebanding machines, namely the F400 45.03 LX (being the machine in question) and the F600 60.06 LX.[5] The email reads as follows:
[5] Exhibit 1.2.
Hi,
Thanks for taking the time to chat to us about edgebanders.
The 2 machines that we believe will see you right with similar features to the Biesse, ease of use, and at a price that won't kill you.
I have received rebates on these from Felder for ordering bulk, so I pass this on as you will see.
Machines:
1) F400 45.03 LX (45mm max height, 3mm max tape, Long, X-motion cnc control).
This is a 10m/min setup, with cnc control of the trimmers, pneumatic release of the radius scrapers and nesting rollers on the trimmers only.
…
2) F600 60.06. LX
10 or 18m/min, twin motor CR, CNC control of all aggregates, CNC height adjustment of pressure beam, Twin motor end trimmer with pneumatic level.
…
Both Machines come with removeable glue pot, so you can always buy a second one for different colours etc etc.
Both have 15 inch touch screen
Both have maintenance built in so you're guided
Both have a built in manual
Thank you again! Let me know what you think and come have a look!
On 19 October 2021 Mr Badenhorst sent separate written quotes with specifications for the two models of edgebanding machines (which for convenience I will refer to as the F400 and F600 machine respectively). These quotes were addressed to 'Lasting Cabinets' (incidentally, an entity unrelated to Mr du Plessis or the plaintiff).[6]
[6] Exhibit 1.3, Exhibit 1.4.
The F400 machine referenced in Mr Badenhorst's email of 19 October 2021 and the quote which followed was for a basic model edgebander. The F600 machine, on the other hand, was a 'high spec' machine.[7] Both quotes relevantly included lists of 'standard' equipment and lists of 'chosen specifications'.
[7] Exhibit 1.4; ts 322, evidence of Mr Badenhorst.
The quote for the F600 machine contained the following options under the section described as 'chosen specifications'.[8]
Number 21 - 1 Piece
Glue scraping unit for nesting (#51/!20)
Upper and lower glue scrapers, pneumatically controlled for nested workpieces. Removes any glue residue. An air nozzle and chip extraction ensure maximum process reliability. The scanning of the surface is carried out with multi copy rollers and allows the processing of workpieces with holes and acute angles.
Number 51 - 1 Piece
Multi-functional trimming unit with vertical reference rollers for the processing of workpieces with hinge bores (#64)
Allows the processing of workpieces with hinge bores/rear panel grooves as well as sharp angled workpieces.
[8] Exhibit 1.3, pages 11 and 12.

The quote for the F400 machine did not include either the optional specification number 21 or number 51.
The plaintiff's evidence was that at all relevant times prior to his decision to purchase, he believed that the F400 machine could be customised to meet his requirements by the addition of options upon request.
Mr du Plessis did not accept either of these quotes and delayed any further inquiry to purchase a new machine until mid-2022.
In late May or early June 2022 Mr du Plessis reinvigorated his inquiries to purchase a new edgebanding machine. He visited the Felder premises and spoke to Mr Badenhorst in person.
Mr du Plessis testified that when he spoke to Mr Badenhorst in June 2022:[9]
[They] had a discussion of how we process our parts, how we make our kitchens. I told him exactly what I wanted. … I specifically said 'I want a machine where I don't want to touch it, the part coming off'. That was my specific words, 'I don't want to touch it' meaning it had to be finished, complete.
[9] ts 56.
Mr du Plessis said that he told Mr Badenhorst that the machine he had been using was Biesse Akron 440 and gave him the model number.[10] Mr Badenhorst testified that he could not recall whether Mr du Plessis had given him the model number of the Biesse machine but he did not deny that he had done so.
[10] ts 56.
On 7 June 2022 Mr Badenhorst sent Mr du Plessis another quote for an edgebanding machine Tempora F400 45.03LX.[11] This quote was not addressed to either Mr du Plessis or the plaintiff company but to an entirely unrelated entity. Nevertheless, I infer that Mr Badenhorst had prepared quotes for prospective buyers and that Mr Badenhorst was prepared to make an offer to Mr du Plessis in substantially similar terms.
[11] Exhibit 1.8.
The written quote was attached to an email from Mr Badenhorst which said:[12]
Please find attached a spec that would work for you.
The F400 has nesting installed on the multifunction top and bottom trimmer unit (3 rollers so it doesn't dip into the hinge bores).
If you wanted the F600 as per the last quote, I have one being built later, but this will be end of year as we don't overpromise anything with current global issues.
(my emphasis in bold)
[12] Exhibit 1.5.
On 7 June 2022, Mr du Plessis' wife sent an email to Mr Badenhorst requesting a quote for further specifications to include a 'portable extractor'.[13] Later the same day, Mr du Plessis received an 11‑page quote addressed to the plaintiff for the F400 model containing an additional specification for a 'portable extractor'.[14]
[13] Exhibit 1.9.
[14] Exhibit 1.14.

The terms of the written quote dated 7 June 2022

The first section of the quote dated 7 June 2022 was addressed to the plaintiff company and contained a description of the F400 machine. The second section of the offer contained a list of the machine's features under the heading 'standard equipment'.
Relevantly, the third part of the offer under the heading 'Included additional items' contained the following chosen specifications:[15]
[15] Exhibit 1.14.
Number 20 - 1 Piece
Glue scraping unit, mechanically controlled
Upper and lower glue scraping unit. Removes any remaining glue residue. The copying of the surface is carried out by a copy roller.
Number 32 - 1 Piece
Spraying unit for cleaning agent positioned before buffing unit (only in combination with the buffing unit)
The cleaning fluid cleans the surface of the workpiece and edges and prevents the buffing pads from becoming blocked up with glue.
Number 51 - 1 Piece
Multi-functional trimming unit with vertical reference rollers[16] for the processing of workpieces with hinge bores (#64)
Allows the processing of workpieces with hinge bores/rear panel grooves as well as sharp angled workpieces.
[16] It is common ground that the term 'vertical reference rollers' is a reference to the nesting package; ts 38; Exhibit 1.61.
Next to the description of the option number 51 was a picture of a nesting package.
Mr du Plessis' evidence was that he compared the quote for the F400 received in June 2022 with the quote for the F400 received in October 2021[17] and had noted some differences. Importantly, he noted that the October 2021 quote had not contained option 'number 51' being the 'multi‑function trimming unit with vertical reference rollers for the processing of workpieces with hinge bores' but the June 2022 quote did.[18]
[17] ts 57.
[18] Exhibit 1.5
Mr du Plessis said he then looked at the Felder website[19] noting that the website information for the F400 had a picture of a 'nesting package' (just like the picture appearing in the June 2022 quote for the F400 under chosen specification number 51).[20]
[19] ts 57.
[20] Exhibit 1.61, page 212.
Also, the website contained a verbal description of the nesting package depicting therein the following terms:[21]
The nesting package optimises the processing of work pieces with hinge borings or surfaces with acute angles ...
[21] Exhibit 1.61; page 212.
Mr du Plessis noticed that the June 2022 quote was $8,000 more expensive than the quote he had been presented with in October 2021. He assumed that the reason for the increase in price was the inclusion of the nesting package.[22]
[22] ts 59.
Under cross-examination, Mr Badenhorst agreed that the format of the October 2021 offer contained a section described as 'standard equipment' and a section described as 'chosen specification'. He explained that he would select the chosen specifications for inclusion in the quote.[23]
[23] ts 212.
Mr Badenhorst's evidence was that, provided that a machine was installed with a combination of option 21 and option 51, it would be able to process workpieces with hinge bores and rear panel grooves as well as sharp angled workpieces.[24]
[24] ts 212.
However, Mr Badenhorst said that a 'standard' F400 could not be used for the processing of workpieces with hinge holes.[25]
[25] ts 213.
Under cross-examination Mr Badenhorst (who was an agent for the sale of Felder products) acknowledged that the Felder website contained a claim that the 'nesting package optimises the processing of your workpieces with hinge borings or surfaces with acute angles'.[26]
[26] ts 214.
Mr Badenhorst attempted to qualify this statement by saying that it was dependent on 'which options you select'. He said that the nesting package was referable only to the 'multi-function trimming unit' (and not to the radius or glue scrapers). However, Mr Badenhorst conceded that, the description of the nesting package on the website[27] (which contained a corresponding image of a nesting package the same as the one contained under the description 'option 51' in the June 2022 offer) did not contain any qualification about the selection of options.
[27] Exhibit 1.61, page 212.
Mr Badenhorst ultimately conceded that, in relation to the F400 machine sold to the plaintiff, the processing of certain pieces could not be completed without manually disengaging or manipulating parts of the machine.[28]
[28] ts 217.
There was no qualification either on the Felder website or in the offer of June 2021 concerning the website's claim that the 'nesting package optimises the processing of workpieces with hinge borings or surfaces with acute angles'. Neither Mr Badenhorst, nor any agent of the first or second defendants, had ever explained to Mr du Plessis prior to him entering into the contract for sale, that, when processing pieces with hinge borings or sharp angles, there would be a need to make manual adjustments to the machine or to finish the processing of pieces manually.

Evidence of problems with the F400 machine after delivery

Mr du Plessis was unaware of the limitations of the F400 machine until after delivery.
Mr du Plessis gave evidence of experiencing problems with the F400 machine from the day it was installed. Two of his employees also gave evidence of the problems they had experienced with the machine.
The day after the F400 machine was installed, Mr du Plessis sent Mr Badenhorst a text message complaining that, when processing panels with hinge holes, the machine would 'dig in' and damage the panel.[29]
[29] ts 61.
On 8 July 2022 Mr Badenhorst replied, 'Yes. Chatting with him. Needs to disengage scrapers on bottom so they don't dig in'.[30]
[30] ts 62.
Mr du Plessis said that, by disengaging the scrapers as Mr Badenhorst had suggested, this had resulted in the edging standing 'proud' above the surface of the pieces. This meant that the panels would have to be finished using a manually operated blade scraper.[31]
[31] ts 62.
In a text message dated 12 July 2022, Mr du Plessis complained to Mr Badenhorst about the bottom glue scraper leaving 'quite a bit of glue'.[32] Mr du Plessis said that Mr Badenhorst subsequently came out 'multiple times' to attend to the problem of the glue scraper.[33] However, according to Mr du Plessis, Mr Badenhorst failed to solve the problem.
[32] ts 63.
[33] ts 63, ts 64.
On 13 July 2022 Mr du Plessis sent a text message to Mr Badenhorst complaining that the edger was edging or milling 'out of square'.[34] The same day, Mr Badenhorst sent a text message to Mr du Plessis informing him that he would get 'Darnie' (Darnie de Jager, a Felder technician) to attend to fix the issues. Mr de Jager subsequently attended and adjusted the machine.
[34] ts 64.
Mr du Plessis said that, although the machine had supposedly been fixed nine weeks after its installation, it was still 'edging out of square'. He had been able to adjust the doors to make it work[35] but then noticed another aspect of the machine malfunctioning, namely that the 'corner round [was] now digging in'.[36]
[35] ts 64 - ts 65.
[36] Exhibit 1.58, page 173.
On 21 July 2022 Mr du Plessis sent a text message[37] to Mr Badenhorst listing the various problems he had experienced with the F400 machine in the following terms:
[37] Exhibit 1.58, page 174.
The following issues we are finding:
1) Corner rounding digging in on gloss tape material
2) all parts are out of square just tested it again now
3) some edges are jagged not smooth
4) we having to adjust and compensate constantly mainly to radius scrapers and glue scrapers
5) no consistency, through not even one job
6) is there a way to not turn the glue scraper off when edging doors
7) is there a way to jot adult radius scraper when edging doors
8) when edging internal drawers the scraper digs in
9) some sort of burn mark on tall panels
I'm pretty sure that's it
Mr du Plessis said that in the month after installation of the F400 machine, Mr Badenhorst had attended 14 times but the issues persisted.[38]
[38] ts 66.
On 5 August 2022 Mr du Plessis sent Mr Badenhorst the following text message complaining about the problems with the F400 machine.[39]
We are putting test pieces through fine then put board through it digs in to the edging, then digs in to the material.
It's definitely edging out of square.
It's getting ridiculous now.
The only reason we doing Tuesday is because we are busy, like I said it's a nightmare getting jobs through we have to hand clean every thing, I'm pretty disappointed as we bought a product that does not work
[39] Exhibit 1.58, page 178; ts 66 - ts 67.
Sometime after many failed attempts to get the F400 machine to operate according to expectations, Mr du Plessis requested that Mr Badenhorst send him the manuals for the F400 machine.[40] Mr Badenhorst provided him with a copy of the manual on 8 August 2022.[41]
[40] ts 67.
[41] Exhibit 1.66; ts 67.
After reading the manual Mr Badenhorst had sent him, it began to dawn on Mr du Plessis that the F400 machine did not have the nesting package necessary to properly process pieces with hinge holes.[42] Mr du Plessis said, having come to that realisation, he hand wrote on the manual the words 'multiple copy rollers (nesting)' and 'hinge function does not work. It does nothing'.[43] Mr du Plessis explained that, although the F400 machine contained a screen which had an icon you could select for the processing of pieces with hinge holes, when the icon was pressed, 'it did nothing' (ie it did not function).[44] Mr du Plessis said that he had 'slowly started realising' that he had not received what he had asked for or was quoted on.[45]
[42] ts 68.
[43] Exhibit 1.66, page 272.
[44] ts 69.
[45] ts 70.
By August 2022 Mr du Plessis was not happy with the service Mr Badenhorst had provided so he wrote to Felder in New South Wales to complain and seek assistance.[46]
[46] Exhibit 1.16; ts 70.
In an email to the New South Wales office, Mr du Plessis set out his various misgivings and complaints in the following terms:[47]
Hi,
As discussed After Kon [a reference to Mr Badenhorst, Mr Badenhorst] from Felder installed our new Felder Edge bander it has never worked properly, it still to this day is not working properly, Kon [Mr Badenhorst] has given all our staff including myself misleading information with regards to the operation of the Felder.
Misleading information Like the following: Having to completely isolate and change glue scrapers and radius scraper for a particular Board and doors with Hinges, every time Kon has been to your factory which is now more the 7 Times to adjust the machine we get a different story on how to operate the Machine.
The Machine got installed Wednesday the 6^th of July I is now 26 August and we still do not have an Englander theta can edge consistently
[47] Exhibit 1.15, Exhibit 1.16.
Mr du Plessis received a response to his email from Tim Birkenbach, a Felder technician based in New South Wales. Mr Birkenbach then came to Perth and spent three days working on the F400 machine.[48]
[48] ts 70.
Following Mr Birkenbach's visit, Mr du Plessis asked Mr Birkenbach for a report. In a subsequent written report Mr Birkenbach expressed the conclusion that 'outcome after service was that the machine operates as desired'.[49]
[49] Exhibit 1.21, page 74.
The plaintiff does not accept Mr Birkenbach's assessment that the F400 machine 'operated as desired'. It remained the case that pieces with hinge holes had to be finished by 'hand planing' to replicate the functions of the radius and glue scrapers.
In his written report, Mr Birkenbach acknowledged the limitations of the F400 machine. He referred to the fact that the units could be set to 'floating' to enable the machine to process hinge holes without 'dropping in'. However, he also reported that this was 'not ideal' as the unit 'does not follow the contour of the board, but rather floats underneath'. He suggested the possibility of making either a 'long plastic shoe' or 'multiple copy rollers' to process hinge holes.[50]
[50] Exhibit 1.21.
Mr du Plessis said that after Mr Birkenbach had attended, he resolved to continue to use the machine and use a manual process to 'clean up the product to get it out of the door'. Plainly, Mr du Plessis regarded Birkenbach's set‑up as a temporary and only partial solution to the problems with the F400 machine.
By October 2022 the plaintiff had given notice to the defendant that it rejected the F400 machine and required the defendants to take back the machine and return the purchase price. The defendants refused.

Further evidence of problems with the F400 machine: the evidence of Kris Stephen Parker and Bradley Wayne Johns

Mr Parker has been a cabinet‑maker for 16 years and was employed by the plaintiff.
Mr Parker said that, prior to the F400 machine arriving, there were two principal machines in the business namely a 'CNC' machine which cut out the parts for the cabinetry and a Biesse edgebanding machine.[51]
[51] ts 164.
Mr Parker had used the Biesse machine which had worked 'good'. He said the machine would clean up all by itself and [the pieces] would then be ready.
Mr Parker first met Mr Badenhorst when the F400 machine was brought to the workshop to be installed. He said that Mr Badenhorst was there for a full day and provided instruction in relation to the machine's operation. Whilst Mr Badenhorst was doing the set up, they ran some pieces through the machine but they were just standard melamine pieces that were used for cupboards.[52] (He was unsure whether those pieces had hinge holes).
[52] ts 166.
Mr Parker said that the next day the F400 machine was not working as before. He said that the cutters were digging into the board. The end saws were not cutting off properly and the corner rounding was digging into the edge tape. He said that Mr Badenhorst came in and made some adjustments but after that he is not sure what happened.
Mr Parker said that the F400 machine still comes up with errors to do with the corner rounding on workpieces. Sometimes the machine does not 'corner round' it properly or it says that the pieces are too small to do the corner rounding on it, so they have to finish the pieces by filing or scraping them by hand.[53]
[53] ts 169.
Mr Parker recalled an occasion when he, Mr Johns and another employee all used the F400 machine to edge a square drawer piece. The pieces had all come out slightly different and were not square.[54]
[54] ts 170.
Bradley Johns, a cabinet‑maker who worked for Mr du Plessis gave evidence that, prior to the plaintiff purchasing the F400 machine, they had used the Biesse machine which had no issues. He said that the Biesse machine did not require any change or modification or any manual adjustment when processing pieces with hinge holes.[55]
[55] ts 156.
Mr Johns recalled that in 2022, when the F400 machine arrived, he had been involved in its setting up. He said that they tested the machine by placing scraps of MDF[56] through the machine.[57] However, the day after it was installed, the F400 machine had dug into the hinge hole of a door piece. Mr Johns said he contacted Mr du Plessis to arrange for Mr Badenhorst to come back.[58] After Mr Badenhorst had come back, the F400 machine did not dig into the hinge holes but there were other problems. The F400 machine was then milling pieces 'out of square' on every job.[59]
[56] Medium Density Fibreboard.
[57] ts 157.
[58] ts 158.
[59] ts 160.
Also, Mr Johns said that they had to manually clean the workpieces up by scraping glue off the edging.[60]
[60] ts 160.
Mr Johns recalled that numerous people came to do testing on the machine to try and fix the 'squareness' issues. He recalled an occasion when he, Kris Parker and another employee all edged a set of drawers. They had all placed the same part (a set of drawer fronts) through the machine to test for continuity or to see if it was 'user error'. He said every part came out different.
Under cross‑examination, Mr Johns denied that the issues of the pieces being 'out of square' had been fully resolved. He said that sometimes he still sees pieces that are out of square. He said this would happen about monthly.[61]
[61] ts 163.

The expert evidence: evidence of Malcolm Brewer and Daniel de Jager

At the request of the parties, orders were made to permit the expert witnesses to give concurrent evidence.
Malcolm Linley Brewer, a technician with 30 years in the cabinet making industry gave evidence for the plaintiff.
Daniel (Danie) de Jager, a technician employed by Felder, gave evidence for the defendants.
Mr Brewer and Mr de Jager were each cross‑examined by counsel.

Mr Brewer's evidence

Mr Brewer gave evidence that he had examined and tested the F400 machine. In his assessment, the machine supplied to the plaintiff was incapable, without adjustment, of processing pieces with hinges or sharp angles and was incapable of processing pieces with hinge holes without disengaging (ie manually removing from operation) either the radius or glue scraper or both.
The evidence of Mr Brewer is best encapsulated by the following excerpt from the transcript:[62]
[62] ts 268 - ts 269.
McGOWAN, MR: … Mr Brewer, but just taking this report, are you able to summarise the key points of the report?
BREWER, MR: Yes. The key - the key issue has been the nesting package, which in my opinion wasn't installed on the machine. There was other things like the extended infeed fence, a spray unit, dust extractor. I think that's the basis of - of the bulk of it.
McGOWAN, MR: And the absence of a nesting package in your opinion meant what in terms of the operation of this machine?
BREWER, MR: It means that you can't put through panels with hinge holes that will give you a finished panel.
McGOWAN, MR: … So if you were to put through a panel that had hinge holes in the set-up as you saw it, what would be the result?
BREWER, MR: It would damage the panel where the hinge hole is.
McGOWAN, MR: Right. And is there any way that that could be overcome?
BREWER, MR: Only by removing the radius scraper and flat scraper from the machine. … Well, from contact with the panel.
McGOWAN, MR: And if you did that, what would you then have to do?
BREWER, MR: Then you'd have to planer blade the panel to finish it.
LONSDALE DCJ: You'd have to do what, sorry?
BREWER, MR: Planer blade it, which is a - a term we use in the industry, your Honour, where we - we use actually a planer blade to finish the board off to an acceptable standard that you would expect a customer to - to want to have in their - - -
LONSDALE DCJ: Thank you? - - - Yeah.
McGOWAN, MR: Would that be a function you would expect the radius scraper and the flat scraper to otherwise do?
BREWER, MR: Yes. That's the purpose in the machine.
LONSDALE DCJ: Can I just ask - sorry, Mr McGowan - the radius scraper and the flat scraper, are they two separate processes?
BREWER, MR: They're two separate units, your Honour.
LONSDALE DCJ: And they do different things?
BREWER, MR: Yes, they do.
LONSDALE DCJ: What does the radius scraper do?
BREWER, MR: The radius scraper is designed to take away the chatter marks left from the cutter that the trimming unit produces.
LONSDALE DCJ: Yes?
BREWER, MR: And the flat scraper is designed to take - take off any glue residue, or it can also take off just a - a fraction of the material left over by the - the radius scraper.

Mr de Jager's evidence

Mr de Jager's opinion (expressed in an undated written report) was that the 'option 51 installed is perfectly capable of achieving the results needed and it can process both hinged and angled/special/acute/obtuse workpieces'.[63]
[63] Exhibit 1.74, page 324.
In his report, Mr de Jager included a link to videos of a similar machine performing the processes perfectly. Under cross-examination, Mr de Jager conceded that, in order for the F400 machine to process pieces with hinge holes or acute angles, it would be necessary to disengage the radius and glue scrapers.[64]
McGOWAN, MR: And on this machine, Mr du Plessis' machine, Lasting Impressions' machine, in order to deal with panels that have hinge borings, you have to disengage either the radius scraper (?) or the glue scraper, or both, don't you?
DE JAGER, MR: Yes.
McGOWAN, MR: And if you do that, then you have to manually finish the pieces, don't you?
DE JAGER, MR: No.
McGOWAN, MR: Because the purpose of the radius scraper and the glue scraper is to finish the piece. Isn't that their role?
DE JAGER, MR: It's to finish it. But you can - you can adjust the top of - - -
McGOWAN, MR: Is that their role or not?---To finish.
DE JAGER, MR: Yes.
[64] ts 314 - ts 315.
Mr de Jager maintained that, in his opinion, there were no defects with the machine and that the problems involved operator error. However, for reasons which follow later in these reasons, I do not accept Mr de Jager's evidence.
Mr Badenhorst's position is that the machine was not defective.[65] However, he too conceded that the scrapers needed to be disengaged when processing pieces with hinge holes as the following exchange from his cross‑examination demonstrates:
[65] ts 218.
McGOWAN, MR: All right. The radius scraper and the glue scraper are the steps by which the process is finished, isn't that right?
BADENHORST, MR: They are two of the steps, correct.
McGOWAN, MR: Well, what else is the last of the steps?
BADENHORST, MR: The buffing.
McGOWAN, MR: Right. All right. We'll put the buffing to one side. Apart from the buffing, those two, radius scraper and glue scraper, can I call them the finishing unit?---Would we be able to refer them - to them as separate items?
All right. So what - in order to prevent gouging, digging in, et cetera, you'd have to disengage both the radius scraper and the glue scraper, is that right?
BADENHORST, MR: You'd have to disengage the glue scraper on the side where you're worried about digging in. And with the radius scraper, you can either disengage it or you can adjust it, so that - - -
McGOWAN, MR: All right?---
BADENHORST, MR: it doesn't dip into the holes.
McGOWAN, MR: So in other words, you've - you've sold a $100,000 machine, and in order to deal with pieces that have hinge holes in, you have to disengage or adjust or otherwise move away from the factory settings for two important functions within the machine, is that your evidence?
BADENHORST, MR: The initial inquiry was of a $200,000 machine‑‑‑

Findings as to credibility of experts

In the end, there was no material disagreement between the experts that the radius and glue scrapers needed to be disengaged or manipulated to avoid damage to workpieces with hinge holes.
However, insofar as I need to resolve a preference for the evidence of one expert, I would prefer the evidence of Mr Brewer to that of Mr de Jager.
Mr de Jager said that he had read the Experts Code of Conduct and had complied with it. Plainly, he either did not understand his obligations as an expert or chose to ignore them. Mr de Jager presented as if he were an advocate for the defendants, demonstrated by evidence that emerged in his cross‑examination, namely that Mr Badenhorst had in effect co‑written his report. The following excerpt of the cross‑examination illustrates this point.
McGOWAN, MR: Right. Now, if we just go back, just so we can complete this, if you go back to page 324 - and I'm happy to take you through the various bits - but, again, see where the words in the middle of the page:
The nesting package unit as per the document
You see that?
DE JAGER, MR: Yes.
McGOWAN, MR: Now, can you tell her Honour whether any part of the next four paragraphs are your words, as opposed to Mr Badenhorst's words that he's dropped into your report?
DE JAGER, MR: It's a combination.
McGOWAN, MR: So he cowrote the report?
DE JAGER, MR: We - we - we sit down, we - we wrote it together.
McGOWAN, MR: Whose name, just remind me, whose name appears on the report?
DE JAGER, MR: Mine.
McGOWAN, MR: Does his name appear on the report?
DE JAGER, MR: No.
McGOWAN, MR: So would it be fair to say that he was the guiding hand directing how this report was to be written?
DE JAGER, MR: I did ask for assistance.
McGOWAN, MR: Is that right or not?
DE JAGER, MR: Yes.
McGOWAN, MR: Was writing a report like this something that you had never done before?
DE JAGER, MR: I haven't done before. No.
McGOWAN, MR: No.
Under cross‑examination Mr Badenhorst had also been questioned about his input into Mr de Jager's report and reluctantly agreed that he had, in fact, had substantial input into its preparation. The following excerpt from Mr Badenhorst's cross‑examination illustrates the point:[66]
[66] ts 235 - ts 236, ts 238.
McGOWAN, MR: You prepared the whole document, didn't you? All of this is yours, 319 to 322 inclusive. You prepared all of this, isn't that right?
BADENHORST, MR: No
…
McGOWAN, MR: What I'm trying to get to is this was something that you prepared. You sent it off to Felder in Austria. You got some input. Or provided your own input and you provided the final product to Mr de Jager, isn't that right?
BADENHORST, MR: I provided some information to him, but not the final product.
McGOWAN, MR: The final product meaning what we see on pages 321 to 322, isn't that right?
BADENHORST, MR: On that, I don't know if it was to Mr de Jager or to Mr Kotze. I do not recall.
McGOWAN, MR: This is all for the purpose of the expert report, isn't it? That's what it's about. That's why it forms part of this letter of 4 April 2023, isn't it?
BADENHORST, MR: I was - it - it would seem like it's my response to what Mr Brewer's report was.
…
McGOWAN, MR: Right. Which you included again so we're absolutely crystal clear for Mr de Jager and to form part of the evidence proposed to be led by Mr de Jager, correct?
BADENHORST, MR: Seem so.
McGOWAN, MR: And if we go over to page - back to page 316. These ‑ these videos whatever they are, the four of them referred to at the bottom of 316 and over to 317, they're not Mr de Jager's videos, are they?
BADENHORST, MR: No, those are Felder videos.
Based on the foregoing cross-examination of Mr Badenhorst and Mr de Jager, the irresistible inference is that Mr Badenhorst had substantial input into the report of Mr de Jager.
Mr de Jager's written report makes no reference to Mr Badenhorst's input into its preparation. Mr de Jager has thus been shown to lack the independence necessary for me to give his evidence any weight. Mr Badenhorst's evidence also reveals a lack of understanding on his part about the importance of ensuring the integrity of evidence presented to a court.

Findings as to the credibility of Mr du Plessis and Mr Badenhorst

As the foregoing reveals, neither Mr de Jager nor Mr Badenhorst are witnesses on whose evidence I should rely. I was otherwise unimpressed by Mr Badenhorst as a witness. He was defensive and did not always answer questions directly.
I found Mr du Plessis, on the other hand, to be an honest witness whose evidence was consistent with the objective evidence. Where there is a conflict between the evidence of Mr du Plessis and Mr Badenhorst, I prefer the evidence of Mr du Plessis.

Findings as to whether pleaded representations were made

On the basis of Mr du Plessis' evidence and the documentary evidence, I make the following critical findings of fact.
Mr du Plessis first spoke to Mr Badenhorst about purchasing an edgebanding machine in October 2021.
Mr Badenhorst presented a written quote in October 2021 which Mr du Plessis did not accept.
Mr du Plessis subsequently spoke to Mr Badenhorst in or about June 2022 and told him of his requirements: he told him he was looking for an edgebanding machine that would replicate the processes of his Biesse machine, ie a machine that would process pieces without manual intervention.
In June 2022 Mr Badenhorst presented Mr du Plessis with a written quote for the F400 machine containing the chosen option 'Number 51'. This option had not been contained in the earlier quote presented in October 2021.
Mr du Plessis was given to understand that Felder edgebanding machines were capable of being customised.
The written quote in June 2022 which contained the chosen specification 'option 51' also contained a corresponding image of a 'nesting package'.
Mr du Plessis went on to the Felder website in order to inform himself about the Felder machines specifications. Text on the Felder website claimed that the F400 machine had a nesting package that 'optimises' the processing of pieces with hinge borings or sharp-angled workpieces; that text appeared near an image of a nesting package just like the image appearing near the description of the nesting package in option 'number 51' on the written quote.
The F400 machine sold to the plaintiff did not have a nesting package operating on the finishing processes of the machine which required the machine to be manually adjusted to prevent damage to workpieces. The absence of the nesting package on the finishing processes of the machine resulted in a requirement for the workpieces to be finished manually.

Legal principles - the test for misleading and deceptive conduct

The next question I must resolve is whether the defendants' representations made to Mr du Plessis about the functionality of the F400 machine were misleading or deceptive or likely to mislead or deceive.
Section 18(1) of the ACL provides:
(1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
In Nea Pty Ltd v Magenta Mining Pty Ltd[67] Martin CJ by reference to the authorities, reiterated the test for what constitutes misleading and deceptive conduct under s 52 of the Trade Practices Act 1974 (Cth) (TPA) (the forerunner to s 18(1) of the ACL):
[67] Nea Pty Ltd v Magenta Mining Pty Ltd [2007] WASCA 70 [125] - [127].
125… the question of whether conduct is properly characterised as misleading and deceptive is to be determined objectively, albeit having regard to the particular positions of the parties, their knowledge and experience and all the circumstances of their communications. In some classes of case, the misleading and deceptive conduct will be undertaken in relation to an entire range of persons of which the particular claimant was not an identifiable part at the time of the alleged conduct. However, in many cases, such as this case, the conduct will take place in relation to particular identified persons. It was held in Butcher v Lachlan (supra) that in such cases, the question of whether or not the conduct is properly characterised as misleading and deceptive is to be assessed having regard to the particular characteristics of the persons to whom the conduct was directed. However, the question remains an objective one, as is clear from the following passage in the judgment of the majority in the High Court at [37]:
So here, it is necessary to consider the character of the particular conduct of the particular agent in relation to the particular purchasers, bearing in mind what matters of fact each knew about the other as a result of the nature of their dealings and the conversations between them, or which each may be taken to have known.
126Although in dissent in the result, the same proposition was more fully enunciated by McHugh J in the following passage at [109]:
The question whether conduct is misleading or deceptive or is likely to mislead or deceive is a question of fact. In determining whether a contravention of s 52 has occurred, the task of the court is to examine the relevant course of conduct as a whole. It is determined by reference to the alleged conduct in the light of the relevant surrounding facts and circumstances. It is an objective question that the court must determine for itself. It invites error to look at isolated parts of the corporation's conduct. The effect of any relevant statements or actions or any silence or inaction occurring in the context of a single course of conduct must be deduced from the whole course of conduct. Thus, where the alleged contravention of s 52 relates primarily to a document, the effect of the document must be examined in the context of the evidence as a whole. The court is not confined to examining the document in isolation. It must have regard to all the conduct of the corporation in relation to the document including the preparation and distribution of the document and any statement, action, silence or inaction in connection with the document. (footnotes omitted)
127McHugh J emphasised the objective nature of the test when he observed at 626 [111], 'Conduct that objectively leads one into error is misleading'.

Findings as to whether the defendants engaged in misleading or deceptive conduct or conduct likely to mislead or deceive

I find that, having regard to the language of the representations in the context of the dealings between Mr du Plessis and Mr Badenhorst viewed as a whole, the defendants' representations were, either alone or in combination, likely to mislead or deceive Mr du Plessis. My reasons are as follows.
Mr du Plessis' evidence (which I accept) was that, when he attended at the Felder workshop, he had told Mr Badenhorst that he wanted a machine where he did not have to touch the pieces. Mr du Plessis' evidence in this regard makes sense having regard to the undisputed fact that he was looking for a machine to replace a machine which had not required manual finishing of workpieces. Mr du Plessis' evidence was that he had given Mr Badenhorst the model number of the Biesse machine. I can readily infer that he did so in order that Mr Badenhorst would be able to present a quote for a machine to replicate the functions of the Biesse.
Whilst Mr Badenhorst did not recall Mr du Plessis having described the features of the Biesse machine or Mr du Plessis giving him its model number, he did not deny that Mr du Plessis had done so. In any event, I accept Mr du Plessis' evidence on this point. He told Mr Badenhorst he wanted a machine where he did not have to touch the pieces.[68]
[68] ts 56.
It follows from the foregoing that Mr du Plessis would have been expecting Mr Badenhorst to present a quote for a machine with functions comparable to the Biesse machine, rather than a machine with an inferior functionality. Relevantly, Mr Badenhorst, in an email attaching the June 2022 quote, said that the machine being quoted for had a 'spec that would work for you'. In the context of Mr du Plessis having recently indicated what he was looking for in a replacement machine, Mr du Plessis was entitled to expect that the quote was for a 'like for like' machine.
Secondly, the wording of option number 51 as it appeared in the June 2022 quote claims that the F400 machine 'allows the processing of workpieces with hinge bores/rear panel grooves as well as sharp angled workpieces'. These words contain no qualification or explanation that the radius and glue scrapers would need to be disengaged or manually adjusted when processing such pieces. In my view, these words were apt to convey the impression to someone in the position of Mr du Plessis that workpieces with hinge bores, pieces with rear panel grooves and sharp angled workpieces could be processed without manual intervention. Relevantly, these words appear adjacent to the image of a '4‑roller unit' or a 'nesting package'. This image is substantially similar to the image on the Felder website next to the claim, 'The nesting package optimises the processing of work pieces with hinge borings or surfaces with acute angles' (my emphasis added). In my view, the combination of the words in the written quote and the claims on the Felder website, were likely to mislead a prospective purchaser that the pieces could be processed without manual intervention. The misleading nature of these claims would have been compounded by what I have found Mr Badenhorst had said either orally or in emails to Mr du Plessis.
The defendants contend that it was only ever the F600 machine which could have a nesting package operating on the radius and glue scrapers - a fact which must have been obvious to Mr du Plessis on a plain reading of the quotes for both models. However, the defendants' contention does not take account of the fact that Mr du Plessis assumed that any machine he purchased could be customised. I find that Mr du Plessis' assumption in this regard was quite reasonable, having regard to the structure of the written quotes and the language strongly suggestive of the ability of the machines to be customised.
For example, the option number 51 specification appears under the heading 'Included additional items' in the quote for the F400 machine. In my view, the words 'Included additional items' are apt to convey the impression that the machine was able to be customised to include additional items according to the purchaser's requirements. Indeed, Mr du Plessis' evidence was that he believed that the machines could be customised to include features in addition to the standard specifications.[69] Mr Badenhorst himself did not suggest that the two machines proposed could not be customised according to customer requirements.
[69] Exhibit 1.4, page 22; ts 58.
The written quote presented to Mr du Plessis in June 2022 contains no qualification that either the radius scraper and/or glue scraper would need to be disengaged in order to prevent damage to the pieces or that manual finishing was necessary. At no time did Mr Badenhorst alert Mr du Plessis to the fact that the F400 machine could not be customised to include a nesting package operating on the radius and glue scrapers. Such an explanation was, in all of the circumstances, something Mr du Plessis was entitled to expect, given what he had said to Mr Badenhorst about the kind of machine he was looking for. It is apparent that Mr du Plessis only came to know of the absence of a nesting package operating on the radius and glue scrapers after he had experienced many problems with the processing of pieces. Having sought an explanation from Mr Badenhorst, Mr Badenhorst eventually told him that this feature was only available on the F600 machine.
The interpretation of the written quote contended for by the defendants, namely, that any reasonable person would appreciate that there was no nesting package on the radius and glue scrapers, cannot be accepted. The defendants' contention would thus require the person reading the quote to have an innate knowledge of the workings of Felder machines and the second and third defendants' quoting system.
There is no evidence that the quoting system was explained to Mr du Plessis. I find that the full import of the written quotes would not have been easily understood without explanation. This was illustrated during Mr Badenhorst's evidence when he tried to explain that the ability for the Felder machine to have certain specifications was conditional on other components being installed on the machine. He sought to explain, by way of example, that, in order to have Option 51, it was necessary to have Option 64 installed, and this was denoted by reference to numbers contained in brackets in the written quote after the description of the relevant specifications namely (51/#64).
The following portion of Mr Badenhorst's evidence explaining the codes in the quoting system is illustrative of the arcane nature of the Felder quoting system:[70]
[70] ts 183 - ts 184.
JOHNSTONE, MR: Now in respect of the two machines you proposed to Mr du Plessis, you - you - you proposed some - some options?
BADENHORST, MR: Mm hmm.
JOHNSTONE, MR: Now, I'll take you to page 11. Now this is in respect of the F600. And it's probably worthwhile to sort of, you know, keep your finger on the other tab as well in respect of the F400. I note that the F600 has got an item there:
Number 21: one-piece glue scraping unit for nesting.
BADENHORST, MR: Page 11?
JOHNSTONE, MR: Yes. Now, is that a nesting package for lack of better description?
BADENORST, MR: Well, what it is is - now to give you a bit of an idea of the industry, the industry - some companies offer nesting only on the bottom of a machine on certain aggregates. Some provide them on the top of the machine for certain aggregates, all aggregates, et cetera. So the - if you look at this, what this refers to, there's a hash - hash there. That means you have to have option 51 to have this option. Okay? Then you cannot any longer have option 20.
LONSDALE DCJ: What on earth does that mean?
BADENHORST, MR: So option 51 means you have to have bought option 51 to have those on the machine. Okay? Then it means you cannot have option 20 because you - you've got to remove the standard scraping unit to place in - so in the factory, they take out the - or they don't instal the standard one and you've upgraded. So you obviously can't have two glue scrapers - types of glue scrapers sitting next to each other. Same as with the screen. You can't have a 10 inch and a 15 inch screen sitting on the same machine. It's an - it's an option.
LONSDALE DCJ: …
Okay. So:
Glue scraper unit for nesting.
And then you've got in brackets there:
(#51/!20).
BADENHORST, MR: Correct
LONSDALE DCJ: And can you just explain to me what that line means? What it's saying?
BADENHORST, MR: Okay. Do you - are you talking bout what's in the brackets or
LONSDALE DCJ: Yes?
BADENHORST, MR: Okay. So in the brackets it's just basically - so in the - in the Felder quoting system, okay, it basically refers to certain options on a machine. So when - you know, when you select an option, if that option is not possible to do with - or not possible - possible to select with another option, then it tells you about it. Okay? (my emphasis in bold)
LONSDALE DCJ: So are you - - -
BADENHORST, MR: - - - in the case - - -
LONSDALE DCJ: - - - saying that - that ! and the 20 is telling the reader that they can't have that option if they want option 51? (my emphasis in bold)
BADENHORST, MR: No. So what it is saying is you cannot have - if you refer one page - a few pages back, there's option 0 so option 20 on that machine is just the standard glue scraper with a single wheel. Okay? No nesting. All right? And then the hashtag means it must go - it goes hand in hand with option 51 because this is a chosen specification. It's basically saying if you've - if you've gone for the 18 inch wheels on your car, we have car analogies, that you can't have the 15 inch as well on the same vehicle. It's not possible. (my emphasis in bold)

Mr Badenhorst's explanation as to the rules for the availability of certain options including option 51 was not apparent from reading the quote itself. It is unlikely that a person in the position of Mr du Plessis would have been attuned to the arcane workings of the Felder quoting system in the absence of careful explanation about it and it follows that he was vulnerable to being misled.
Even if a person in the position of Mr du Plessis could not have been misled or deceived merely from the written words of the June 2022 quote alone, the claims on the Felder website, namely that the machine had a 'nesting package [which] optimises the processing of workpieces with hinge borings or surfaces with acute angles …' (emphasis added) did, in my view, have a tendency to mislead or deceive the reader.
The verb to 'optimise' includes 'to render optimal, to make as good as possible; to make the best or most effective use of'.[71] In my view, the use of the word 'optimises' in this context, appearing without qualification, is incompatible with the position contended for by the defendants, namely that there was no nesting package operating across all of the functions of the machine (including the radius and glue scrapers).
[71] Oxford English Dictionary.
Mr Badenhorst himself was forced to concede in cross‑examination that the website description did not offer any qualification to the claim that the nesting package promoted optimisation of the processing of workpieces:[72]
[72] ts 214 - ts 214.
McGOWAN, MR: So turn to tab 61 in volume 2. And turn - well, first of all, look at the - the front of it. So this is a print out of what appears on the Felder website, so far as it relates to an F400. Do you agree with that?
BADENHORST, MR: Yeah.
McGOWAN, MR: Yes. You've seen the trial bundle before, you've been through the documents in anticipation of the trial. You know what's in this document, don't you?
BADENHORST, MR: Yeah.
McGOWAN, MR: Right. So turn to page 212. Right. You see that?
BADENHORST, MR: Yeah.
McGOWAN, MR: Now, you're the agent selling the Felder products, aren't you?
BADENHORST, MR: Correct.
McGOWAN, MR: And this is what Felder, the principle of which you are the Agent, describes as the nesting package. That's right, isn't it?
BADENHORST, MR: Package four, yep.
McGOWAN, MR: Right. And that's what it puts on its website, that's what it promotes to anybody interested in buying the product. Do you agree with that?
BADENHORST, MR: It's promotional, yes.
McGOWAN, MR: Yes. It's there on a website for anybody wising to buy the product, to see and understand. You agree with that?
BADENHORST, MR: Yeah. And that's (indistinct).
McGOWAN, MR: And the description is:
The nesting package optimises the process in your workpieces with hinge, borings, or surfaces with acute angles.
So in other words. That's what a nesting package does. Agree?
BADENHORST, MR: Yeah. Depending which ones you select, 100 percent.
McGOWAN, MR: As a concept, and as stated there, that's correct. Isn't it?
BADENHORST, MR: As a concept?
McGOWAN, MR: Yes. So in other words, if you've got a nesting package, it'll optimise the processing of work pieces with hinge, borings, or surfaces with acute angles. That's what it says, isn't it?
BADENHORST, MR: Depending on which options you select, 100 percent.
McGOWAN, MR: And so as a result, if you've got a nesting package, that's what you'd expect it to do, wouldn't you?
BADENHORST, MR: Again, I said depending on which aggregates that's selectable.
McGOWAN, MR: All right.
LONSDALE DCJ: Sorry. Mr Badenhorst, does it say anything there about the selection of options? On page 212 for the nesting package?
BADENHORST, MR: No.

McGOWAN, MR: It's an unqualified statement, isn't it? There's no qualification built in as to - - - ?
BADENHORST, MR: No.

A fact which amplified the misleading nature of the various representations made to Mr du Plessis and resulting in him misunderstanding the limitations of the F400 machine, was that the June 2022 quote was for a sum $8,000 greater than the corresponding October 2021 quote. Mr du Plessis' evidence (which again I accept) was that he had assumed that the higher price in the 2022 quote was because it contained a nesting package to allow the processing of pieces with hinge holes.[73] His assumption in this regard was not unreasonable.
[73] Exhibit 1.11.
I reject the defendants' submission that the plaintiff would have been well aware that the nesting package was on the 'trimmers only'. Although Mr du Plessis agreed that the email sent to him in 2021 for the F400 machine specified 'nesting on trimmers only'.[74] However, Mr du Plessis did not query the suitability of the F400 because he believed (based on what he had been told, what he had read in the written quote and on the Felder website) that the machine could be customised. Indeed, as Mr du Plessis (correctly) noted, the first page of the 2022 quote clearly says 'you can customise your machine to your specific requirements'.[75]
[74] ts 83 - ts 856.
[75] ts 88.
Counsel for the defendants rely on the email dated 7 June 2022 which stated that the F400 machine has nesting installed on the multifunction top and bottom trimming unit. Although the quote is expressed in those terms, it is understandable that Mr du Plessis regarded this description as a reference to the 'standard item' because this detail appears under the heading 'Standard equipment' in the quote.[76] In this regard, the fact that the June 2022 quote contained option number 51 (whereas the October 2021 quote did not) was another factor which had the tendency to induce a belief on the part of Mr du Plessis' that the machine being offered to him was a customised rather than a standard version.
[76] ts 90 - ts 91.

Did the plaintiff act in reliance on the pleaded representations?

It follows from my findings that Mr du Plessis acted in reliance on what he had been told by Mr Badenhorst, what he had read in the quotes and what was on the Felder website. I find that, had Mr du Plessis had been aware of the true position regarding the limitations of the F400 machine, he would not have entered into a contract for its purchase. I find, based on the evidence he gave, he would have retained his Biesse machine or sought to purchase a different machine.

The relief sought

I pause to note that the defendants here had, in effect, accepted a breach of the terms of the written contract insofar as the F400 machine did not contain the 'spraying unit for lubrication agent'. However, this fact alone does not provide a sufficient basis to void the contract because the defendants were, at all relevant times, able to and intending to supply the sprayer in due course. This aspect of the case speaks to a breach of contract which could easily be remedied. However, the fundamental dispute between the parties concerns the misleading and deceptive representations concerning the nesting package which the plaintiff submits justifies an order declaring the contract void ab initio.
The problems occasioned by the absence of the nesting package operating on the radius and glue scrapers are not able to be fixed to Mr du Plessis' satisfaction. As soon as Mr du Plessis realised that the problems could not be rectified, he instructed his solicitors to write to the defendants seeking recission of the contract.[77] The defendants' solicitors wrote to the plaintiff in November 2022, advising that they did not accept that the contract should be rescinded.[78]
[77] Exhibit 1.45.
[78] Exhibit 1.48.
Because the defendants have declined to accept the return of the machine in exchange for the purchase price, Mr du Plessis has had no option but to continue to use the machine making manual adjustments to the machine and finishing workpieces manually.[79]
[79] ts 74.

The basis of the relief sought

The plaintiff submits that to achieve justice to the parties, a combination of remedial orders - that is, orders for the repayment of the purchase price and damages representing the interest costs on the loan to purchase the machine, should be made. The plaintiff concedes that an order for the return of the machine should also be made. The relief sought is thus a combination of compensatory orders and monetary compensation.
Ultimately, the relief sought by the plaintiff is akin to equitable recission but it is statutory relief sought pursuant to the provisions of s 236, s 237 and s 243 of the ACL.
Section 236(1) provides:
236Actions for damages
(1)If:
(a)a person (the claimant) suffers loss or damage because of the conduct of another person; and
(b)the conduct contravened a provision of Chapter 2 or 3;
the claimant may recover the amount of the loss or damage by action against that other person, or against any person involved in the contravention.
…
Section 237 relevantly provides:
237Compensation orders etc. on application by an injured person or the regulator
(1)A court may:
(a)on application of a person (the injured person) who has suffered, or is likely to suffer, loss or damage because another person has engaged in conduct in contravention of a provision of Chapter 2, 3 or 4; or
(b)…
make such order or orders as the court thinks appropriate against the person who engaged in the conduct, or a person involved in that conduct.
Note:The orders that the court may make include all or any of the orders set out in section 243.
(2)The order must be an order that the court considers will:
(a)compensate the injured person, or any such injured persons, in whole or in part for the loss or damage; or
(b)prevent or reduce the loss or damage suffered, or likely to be suffered, by the injured person or any such injured persons.
…
Section 243 provides:
243Kinds of orders that may be made
Without limiting section 237(1), 238(1) or 239(1), the orders that a court may make under any of those sections against a person (the respondent) include all or any of the following:
(a)an order declaring the whole or any part of a contract made between the respondent and a person (the injured person) who suffered, or is likely to suffer, the loss or damage referred to in that section, or of a collateral arrangement relating to such a contract:
(i)to be void; and
(ii)if the court thinks fit - to have been void ab initio or void at all times on and after such date as is specified in the order (which may be a date that is before the date on which the order is made);
(b)an order:
(i)varying such a contract or arrangement in such manner as is specified in the order; and
(ii)if the court thinks fit - declaring the contract or arrangement to have had effect as so varied on and after such date as is specified in the order (which may be a date that is before the date on which the order is made);
(c)an order refusing to enforce any or all of the provisions of such a contract or arrangement;
(d)an order directing the respondent to refund money or return property to the injured person;
(e)except if the order is to be made under section 239(1) - an order directing the respondent to pay the injured person the amount of the loss or damage;
(f)an order directing the respondent, at his or her own expense, to repair, or provide parts for, goods that had been supplied by the respondent to the injured person;
(g)an order directing the respondent, at his or her own expense, to supply specified services to the injured person;
(h)an order, in relation to an instrument creating or transferring an interest in land, directing the respondent to execute an instrument that:
(i)varies, or has the effect of varying, the first mentioned instrument; or
(ii)terminates or otherwise affects, or has the effect of terminating or otherwise affecting, the operation or effect of the first mentioned instrument.

Analysis of the law relating to the potential remedies under s 236, s 237 and s 243 of the ACL and the analogy with the general law

The relief sought be the plaintiff here, is akin to the equitable remedy of recission. It is unnecessary for me to invoke either equitable or common law principles, because of the broad suite of remedies under the ACL but such principles will be a guide: see Tenji v Henneberry & Associates Pty Ltd;[80] Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd;[81] Munchies Management Pty Ltd v Belperio.[82]
[80] Tenji v Henneberry & Associates Pty Ltd (2000) 98 FCR 324, 329 ‑ 330 [12] (French J).
[81] Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1988) 39 FCR 546, 564 - 565 (Lockhart J).
[82] Munchies Management Pty Ltd v Belperio (1988) 58 FCR 274, 288 (Munchies Management v Belperio).
It is necessary for the plaintiff to establish that it has suffered 'loss or damage' for relief to be granted under s 237 and s 243, but quantifiable of loss or damage is not necessary: Jonval Builders Pty Ltd v Commissioner for Fair Trading (NSW).[83]
[83] Jonval Builders Pty Ltd v Commissioner for Fair Trading (NSW) (2020) 104 NSWLR 1 [39], [46] (Leeming JA, Bathurst CJ & Meagher JA agreeing).
Apart from the claim for the cost of interest on the loan to purchase the F400 machine, the plaintiff does not seek to quantify loss or damage in terms of an increase in labour costs although plainly there has been. So how is the plaintiff to be compensated where it does not seek to quantify loss or damage by reference to a monetary sum? The plaintiff submits that this is a 'no transaction' case and that justice requires I make orders akin to ordering equitable rescission.
Counsel for the plaintiff referred to Munchies Management v Belpiero and Metz Holdings Pty Ltd v Simmac Pty Ltd (No 2)[84] as analogous examples of how s 87 of the TPA (the predecessor to s 237 and s 243 of the ACL) provides for a range of remedies available to a victim of misleading or deceptive conduct. Those two cases demonstrate that the range of remedies is more expansive than would have been available under the general law, thus enabling a plaintiff to be placed in the position they were in prior to the impugned conduct.
[84] Metz Holdings Pty Ltd v Simmac Pty Ltd (No 2) [2011] FCA 981 (Metz Holdings).
In Munchies Management v Belperio, the purchasers of a restaurant business sought to rescind the contract of sale because of the fraudulent representations of the vendor's agent. The vendors had refused to accept recission, forcing the purchasers to continue to trade and incur losses. The Full Court, referring to Alati v Kruger[85] (the leading High Court authority on equitable recission) held that the appropriate remedy was one which did not involve an affirmation of the contract, but one having regard to equitable principles of recission. The court held that the vendors, in refusing to accept the return of the property after the purchasers had rescinded the contract, had elected to carry the risk of devaluation of the plant or business that might occur so that any deterioration in the value of the business or plant would not be the responsibility of the purchaser. The court further ordered, having regard to equitable principles that the purchasers could recover, inter alia, interest on the whole of the unrefunded purchase price.
[85] Alati v Kruger (1955) 94 CLR 216.
There are factual differences between Munchies Management v Belperio and the present case. Nevertheless, MunchiesManagement v Belperio is illustrative of how a court might craft a remedy, having regard to the breadth of orders available under s 237 and s 243 of the ACL in order to do justice to the plaintiff.
Metz Holdings was a case in which the applicants had purchased a business in reliance on misleading and deceptive representations. The purchasers sought recission of the contract on the grounds that the business was substantially different from the one that they paid for. The vendor refused to accept that recission had occurred. Consequently, the purchasers continued to run the business, acting as caretakers until such time as orders could be made to reverse the transaction. In finding for the purchaser, Barker J found that merely ordering damages (which would be difficult to quantify) would be an inadequate remedy. Barker J (873 ‑ 874) held that ordering damages without the remedy of rescission would be to 'condemn [the purchasers] to a continuation of a sale transaction that was tainted from the outset with the fundamental misrepresentations … and constitute an unjust outcome that fails to adequately compensate [the purchasers] for their loss'. Barker J went on to make a suite of orders in order to effect recission.
Counsel for the plaintiff sought to draw an analogy between Metz Holdings with the present case: insofar as the plaintiff here had sought to rescind and such recission being refused, the plaintiff was forced into a position where it has no choice but to continue using the F400 machine.
Again, there are factual differences between MetzHoldings and the present case. However, MetzHoldings provides a useful example of how the range of remedies available under the ACL can be deployed to achieve a just outcome between the parties in a 'no transaction' case.
The case of Wyzenbeek v Australasian Marine Imports Pty Ltd (in liq)[86] was another 'no transaction' case that has some factual similarities to the present case although it resulted in a different remedy than the one advocated for here. In that case the court found that the plaintiffs had purchased a yacht in reliance on misleading and deceptive conduct by the vendors. The vendors had misled the plaintiffs that the yacht was capable of crossing oceans when it was not. The plaintiffs spent money on repairs to the yacht and continued to use it. The Full Court held that the plaintiffs were entitled to recover compensation assessed in accordance with the 'value left in hand' approach explained by the High Court in HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd.[87]
[86] Wyzenbeek v Australasian Marine Imports Pty Ltd (in liq) [2019] FCAFC 167; (2019) 272 FCR 373 (Wyzenbeek).
[87] HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd [2004] HCA 54; (2004) 217 CLR 640 (Astonland).
The plaintiffs in Wyzenbeek asserted that, had it known the truth about what was being purchased, it would not have entered into the transaction at all and should be granted relief on the basis of being restored to a position that would have existed if there had not been any transaction. However, in that case it was not suggested that the appropriate remedy was recission. In Wyzenbeek the court gave some hypothetical examples of a 'no transaction' case and in discussing the appropriate approach to the question of relief held at [103]:
There is an obvious difference in substance between what the customer or property owner sought and what was provided in each of those examples, as there was between the capabilities of Cadeau and those of a vessel constructed to comply with a standard or protocol for undertaking ocean voyages.
The court then explained at [105] - [107] how remedies under the TPA were available in circumstances where other remedies under the general law might not be available:
105In a 'no transaction' case, the purchaser will have discovered, some time after becoming aware of the true position, that what he, she or it bought is not what the representor had asserted. In most cases, the asset purchased will have become impaired or less valuable because some event has revealed a flaw in it. But there can be cases where, after a time, the purchaser, having used the asset, realises that it is not what it was represented to be, even though it has retained its market value. Here, for example, if Mr and Mrs Wyzenbeek had realised a week after taking delivery of Cadeau that she could not undertake ocean voyages, but AMI had gone into liquidation, it could not be an answer to a claim under ss 82 or 87 for the other Marina parties to say that Mr and Mrs Wyzenbeek had suffered no loss or damage. They held an asset that they did not want because it was not what the Marina parties had represented her to be. Had they sold Cadeau immediately and sustained a loss, that would have been recoverable from the other Marina parties together with all the costs incurred in the acquisition and sale.
106It is not necessary for present purposes to discuss the juridical requirements and constraints governing the making and resolution of claims to rescind based on innocent, negligent or fraudulent misrepresentations.
107The TPA and its analogues contemplate the ability of the court to give a similar remedy in an appropriate case. However, where the innocent party seeks relief against a person who is not the contractual counterparty, ordinarily, damages or statutory compensation is the only available remedy because the innocent party cannot hand back, or restore, to the third party the property or subject matter of the contract as might be ordered in a claim for rescission. The point to be made is that in a 'no transaction' case, where restitutio in integrum is not possible, if the Court finds for the injured party it must then calculate a monetary sum, as damages, to put him, her or it in the position that the party would have been in had the transaction not occurred. In cases of a contract induced by fraud, as Dixon CJ, Webb, Kitto and Taylor JJ explained in Alati at 223-224:
equity has always regarded as valid the disaffirmance of a contract induced by fraud even though precise restitutio in integrum is not possible, if the situation is such that, by the exercise of its powers, including the power to take accounts of profits and to direct inquiries as to allowances proper to be made for deterioration, it can do what is practically just between the parties, and by so doing restore them substantially to the status quo: Erlanger v. New Sombrero Phosphate Co. [(1878) 3 App Cas 1218, at 1278, 1279]; Brown v. Smitt [(1924) 34 CLR 160, at 165, 169]; Spence v. Crawford [[1939] 3 All ER 271, at 279, 280]. It is not that equity asserts a power by its decree to avoid a contract which the defrauded party himself has no right to disaffirm, and to revest property the title to which the party cannot affect. Rescission for misrepresentation is always the act of the party himself: Reese River Silver Mining Co. v. Smith [(1869) LR 4 HL 64, at 73]. The function of a court in which proceedings for rescission are taken is to adjudicate upon the validity of a purported disaffirmance as an act avoiding the transaction ab initio, and, if it is valid, to give effect to it and make appropriate consequential orders: see Abram Steamship Co. Ltd. v. Westville Shipping Co. Ltd. [[1923] AC 773].
(emphasis added)

Relevantly, the court stated that the purpose of s 82 of the TPA at [118] was to:
… compensate a person who has suffered loss or damage by misleading conduct that contravened the TPA, where that conduct was a cause that materially contributed to the loss or damage. The statutory purpose of s 52 is to prescribe a norm of conduct (not to engage in conduct that is misleading or deceptive) and to give a person whom the representor has misled or deceived a remedy under ss 82 and 87 for the loss or damage the representee suffered by that contravening conduct. The statutory purpose is not served by an hypothetical or counterfactual exegesis into what else might have happened that the representor seeks to raise as an exculpation or mitigation of its liability under ss 82 and 87: Abigroup at [59] ‑ [63]. It could hardly serve the statutory purpose for a contravenor to be able to say that, despite having misled and deceived the representee, the latter is really no worse off because he would have suffered the same loss as that suffered by the misleading conduct in some other transaction that did not eventuate: cf: I & L Securities at [33] and [62].
In Wyzenbeek there was evidence of the depreciated value of the vessel. The measure of damages was thus able to be quantified on the basis of the difference in value of the yacht and the purchase price. (The Astonland measure of damages).
The kind of relief granted in Wzyzenbeek, despite that case having some factual similarities, is not appropriate in the present case. The plaintiff here has no wish to retain the property it purchased. Further, there has been no evidence adduced, either by the plaintiff or the defendants, as to the residual value of the F400 which would permit such an award of damages to be made.
The case of Re Bonney Forge Pty Ltd v Press & Shear Machinery Pty Ltd[88] is another 'no transaction' case and one with the closest factual analogy I could find in the reported cases. In that case, the plaintiff sought a declaration that a contract to purchase a piece of machinery be declared void ab initio and sought consequential damages. The machine that was delivered did not conform to the specifications in the written quote and was defective. The plaintiff sought relief for breaches of s 52 of the TPA claiming that it was induced to enter the contract as a result of misleading or deceptive representations.
[88] Re Bonney Forge Pty Ltd v Press & Shear Machinery Pty Ltd [1988] FCA 121 (Bonney).
In Bonney, Foster J held that the appropriate measure of damages for the supply of a defective machine was to make an order avoiding the contract and directing the return of the machine to the defendants and the return of the deposit to the plaintiffs. In that case there was no contest by the defendant that, if liability was established, that was the appropriate remedy. The decision was appealed, and the appeal dismissed. On appeal there was no challenge to the relief granted.[89]
[89] Bonney.
While the court in that case was not called upon to address the appropriateness of the relief granted, it is nevertheless a factually similar example of how orders for relief can be crafted to achieve a just outcome.

What relief should be granted

I consider that, having regard to the broad range of orders available to me under s 243 and s 237 of the ACL and the various ways those remedies can be crafted, having regard to the authorities I have referred to, I consider that I should make orders effecting recission of the contract. That is because the present case is properly characterised as a 'no transaction' case: had the plaintiff realised that the F400 machine could not process workpieces with hinge borings or sharp angled workpieces without the need for manual intervention, it would not have purchased the machine. The plaintiff's overriding concern is that the machine does not and will never be able to function like the one it ordered.
I accept the plaintiff's submission that it is not in any way feasible for the plaintiff to have returned the machine and to seek the return of the Biesse machine as the defendants lightly submitted. By the time the plaintiff had discovered the inadequacies of the F400 machine, the Biesse machine had been sold. The plaintiff has been unable to afford to buy a new machine because the F400 machine was under finance and, unless the purchase price is returned to the plaintiff, he is not in a position to purchase a new machine. The plaintiff is thus unable to mitigate his losses.
The defendants, having refused the plaintiff's attempt at recission, cannot now contend that the plaintiff has failed to mitigate his loss: see Munchies Management v Belperio [289].
Whilst I could in theory award damages in an action in tort to compensate the plaintiff for past and future labour costs, this would be a very difficult and ultimately inexact exercise. No doubt, that is why the plaintiff has not elected to advocate for damages to be assessed on that basis. If I do not reverse the transaction, then the plaintiffs would be stuck with a machine that it acquired as a consequence of a contract tainted by the misleading and deceptive conduct of the defendants. That would result in an unjust outcome and fail to compensate the plaintiff adequately for its loss.
If I were simply to order refund of the purchase price of the machine, and allow the plaintiff to retain the machine, then this would be to overcompensate the plaintiff. I would therefore order the return of the machine to the defendants. By ordering that the plaintiff return the machine, the plaintiff will not be overcompensated and any loss to the defendants will be mitigated by the return of the machine. I have no reason to consider that the machine does not have some residual value. If the longevity of the plaintiff's Biesse is any guide, then the F400 machine will be able to operate for many years yet and thus would still have significant value.
Any loss in value of the F400 machine cannot be attributable to the plaintiff: the plaintiff sought recission as soon as Mr du Plessis became aware that the inadequacies of the F400 machine could not be rectified. The fact that the plaintiff was forced into a position of having to continue to use the machine is a situation entirely of the defendants' making.
In summary, I have approached the question of relief using the broad suite of remedial options under the ACL by attempting to put the plaintiff back in the position it would have been in prior to the purchase of the machine. That can be achieved by declaring the contract void ab initio, ordering the repayment of the purchase price for the machine to the plaintiff, and ordering that the plaintiff return the F400 machine.
I turn now to consider whether I should order damages representing the interest cost to the plaintiff for the loan on the machine.

Should I award damages for interest on the loan to purchase the F400 machine?

In addition to the compensatory orders sought under s 237 and s 243 the plaintiff seeks an order for damages pursuant to s 236 of the ACL representing the cost of interest on the loan. The plaintiff has not thus far sought to quantify the interest costs but that would be an easy enough task to undertake.
Section 236 of the ACL requires me to select a measure of damages that conforms to the remedial purpose of the statute and to the justice and equity of the case: Henville v Walker.[90]
[90] Henville v Walker [2001] HCA 52; (2001) 206 CLR 459; (2001) 182 ALR 37; (2001) 75 ALJR 1410; [2001] ATPR 41-841.
I consider that, provided that the interest costs are quantifiable, then it is appropriate to make such an order pursuant to s 236 of the ACL.
The defendants might have submitted that compensating the plaintiff by repayment of the purchase price plus interest on the loan would be to overcompensate the plaintiff on the basis that the plaintiff had been deriving some benefit from the use of the machine. In my view, however, that is to ignore the corresponding increase in costs (albeit unquantifiable) that the plaintiff has suffered over the preceding period.
Also, the plaintiff was put in a position where it had no choice but to continue to use the F400 machine. That was a situation induced by the misleading conduct of the defendants. The interest costs to the plaintiff can be directly attributable to that misleading conduct. It is therefore just that I make an order that the defendants pay the plaintiff's interest costs: see Sanrod Pty Ltd v Dainford Ltd.[91]
[91] Sanrod Pty Ltd v Dainford Ltd (1984) 54 ALR 179, 191 (Fitzgerald J).

Orders

Subject to the submissions of counsel, from whom I will now hear, there will be orders in the following terms.
1.There will be judgment for the plaintiff.
2.The defendants pay to the plaintiff the sum of $93,720, being the amount paid under the agreement for sale on or before 6 June 2024.
3.Upon the defendants paying the sum of $93,720 the plaintiff return the F400 Felder Edgebanding Machine to the defendants within 48 hours.
4.The defendants pay to the plaintiff a sum representing the interests cost on the loan associated with the purchase of the machine to be determined if not agreed within 7 days.
5.The defendants pay the plaintiff's costs to be taxed if not agreed up until 7 March 2023.
6.The defendants have until close of business on 24 May 2024 to provide submissions as to the plaintiff's application for indemnity costs and the matter thereafter to be dealt with on the papers.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
LB
Associate to her Honour Judge Lonsdale
17 MAY 2024