Lothar Klein v General Motors Acceptance Corporation, Australia

[1985] FCA 383

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CATCHWORDS

Trade Practices - misleading or deceptive conduct - false or

misleading statement - whether applicant's loss in fact caused by

conduct complained of - Trade Practices Act, 1974 - ss.52, 53, 82

- Hire Purchase - hirer in arrears - voluntary surrender af

vehicle - sale of vehicle by finance company - attempted

redemption by hirer - alleged breaches by finance company of Hire

Purchase Act, 1960.

/

Hire Purchase Act, 1960 (N.S.W.) ss.13,14,15,16.

LOTHAR KLEIN v GENERAL MOTORS ACCEPTANCE CORPORATION, AUSTRALIA

I	N.S.W. G369 OF 1983
CORAM: Bowen C. J.
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i 6 August 1985

I t-. Sydney .

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IN THE FEDERAL COURT OF AUSTRALIA	)
)

SYDNEY	DISTRICT	REGISTRY	)	No. G369 of 1983
)

DIVISION GENERAL )

LOTHAR XLEIN

Applicant

GENERAL MOTORS ACCEPTANCE

CORPORATION, AUSTRALIA

Respondent

m: Bowen C.J.

6 August 1985

REASONS FOR JUDGMENT -

On 13 November 1979 Lothar Klein ("Mr. Klein") entered

into an agreement with General Motors Acceptance Corporation

Australia ("G.M.A.C. " ) pursuant to the provisions of the Hire

Purchase Act 1960 (N.S .W.) to purchase a 1976 Mazda Station

Wagon. The agreement provided for the payment of $190.16 per

month by Mr. Klein to G.M.A.C. Monthly payments were made until

Mr. Klein was retrenched and became unemployed in about April

/

, 1972.

In July 1972, when two instalments were overdue, certain

communications took place between Mr. Klein and G.M.A.C. I shall

deal with these In detail later. On 21 July 1982 Mr. Klein

signed and handed over to Mr. Staples, a representative of

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G.M.A.C. a document described by its heading as "Voluntary

Surrender" and Mr. Klein then drove his vehicle to Ron Hodgson

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Motors, Hume Highway, Cabramatta, motor dealers, and handed it

over to them. Mr. Staples then secured five quotations from

different dealers including Ron Hodgson Motors. The vehicle was sold to Ron Hodgson Motors for $1700 and Ron Hodgson motors paid

to G.M.A.C. the sum of $2320.34 being the amount of the payout

due to G.M.A.C.

Mr. Klein has brought proceedings against G.M.A.C. in

this Court seeking damages under the Trade Practices Act 1974

(Cth.) and under the Hire Purchase Act 1960 (N.S.W.). The amount

of his claim under the Trade Practices Act was quantlfied as

$1297.66 being the difference between the payout figure and the

value of $3600 placed on the vehicle by the valuer called by the

applicant. It was argued that the applicant. should have also

compensation for loss of use of the vehicle, but no evidence was

called which would enable me to place any flgure on that. It was

further argued that the applicant had been. out of his money a

long time and that I should make a retrospective award to cover

Interest. However, the power to award interest prior to judgment

was conferred upon this Court by Act No. 165 of 1984, which inserted s.51A in the Federal Court Act. This section conferred power to award interest in respect of causes of action arising

after the commencement of the section. The power is not

available in respect of the causes	of action relied upon in this
case.

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The amount of his claim under the Hire Purchase Act was

quantified as $1375 being a figure based upon the value of $3600

placed on the vehicle by the valuer called by the applicant and a

calculation made in accordance with sub-para.l5(l)(b)(i) of the

Hire Purchase Act.

Turning to the evidence, it is my impression that the witnesses on both sides gave their evidence honestly to the best

of their recollection. However, I may say that I felt more

confidence in Mr. Ritchie's evidence than that of Mr. Klein when

they differed. Mr. Richie's evidence accorded generally with

notes which he made immediately following his conversations with

Mr. Klein and placed with the company's papers. I believe that

after the lapse of time since -1982 and having regard to the

strong feelings he holds about the matter, Mr. Klein was

sometimes less accurate and inclined to transpose the order of

events.

My findings are that Mr. Klein entered into a hire

purchase agreement with G.M.A.C. for the purchase of a 1976 Mazda

Station Waggon; that under this agreement he undertook to make

42 payments of $190.16 at monthly intervals, such payments to

commence on 13 December 1979; that he made his monthly payments

until	he was retrenched and became unemployed in about April
1982.	It is not entirely clear on the evidence whether he paid

the instalment for April 1982. He agreed in evidence that he did

not pay the instalments for May and June 1982.

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Mr. Klein rang G.M.A.C. on 16 July 1982 and left a

message with the girl telephone operator that he was unemployed

and he asked if it would be alright if he had two weeks extension

to pay the arrears.	He	says the operator said it would be
alright.

On 20 July 1982 he received a handwritten note under door in the following terms: his

"L. Klein.

Arrears $412.06

Urgent you contact re collection of

arrears.

Mark Ritchie on 4111444"

Mr. Klein, on 20 July 1982 rang Mr. Ritchie. There are

some differences in their evidence as to this conversation. I am

satisfied that the handwritten note of Mr. Ritchie made out at

the time accurately records it. The note reads:

"K phoned, advised he is unemployed and

probably won't be able to pay for at least

I	two (2) weeks. Suggested to X he hand back
unit till he can pay arrears, he said if
unit handed back he will not want it back
and will just pay $5 pm off deficiency.
Rep can collect unit 21/7/82 at home.
Field advised. "

On 21 July 1982 G.M.A.C.'s field officer, Mr. Staples,

called upon Mr. Klein. Mr. Staples first asked Mr. Klein would

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he be able to pay 'the arrears on the account. Mr. Klein said

"No. I don't have the money". Mr Staples then explained to Mr.

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Klein how he could obtain an extension by paying a smaller

amount, around $50 or $60, but Mr. Klein was unable to pay this.

They then spoke of repossession and of voluntary surrender. Mr

Staples told Mr. Klein that if he were to sign the voluntary

surrender form there would be no storage fee charged and G.M.A.C.

would be able to sell the vehicle straight away rather than at a

later date which would mean the value of the car dropping. Mr.

Klein agreed. He then appeared to read and understand the

Voluntary Surrender form and he signed it.

Following this Mr. Staples said to Mr. Klein:

"If you drive your car down to Ron Hodqson

Motors, It will save you further money, as

far as the towing fee 1s concerned". .

Mr. Klein said:

"Fine, 1/11 drive it down".

Mr. Klein then proceeded to drive the vehicle to Ron

Hodgson Motors where he handed it over. He drove home with some

friends who had accompanled him in another car.

The voluntary Surrender signed by Mr Klein was in the

following terms:

"Contract No. 759-0804 48210

To /

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General 'I Motors Acceptance Corporatlon,

Australia.

10 Help Street,

Chatswood.

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In exercise of my right under the Hire

Purchase Agreement dated 13 Nov 1979

between the Corporation and myself in

respect of 1976 Mazda 929 I (have returned)

(propose to return) such unit to the

premises of Ron Hodgson Motors at Hume Hawy Cabramatta at which place I understand the Corporation will accept such return. I acknowledge that the Corporation has not

exercised any compulsion on me, or made any

demand for such return, and that such

Corporation is entitled to dispose of the

unit by sale or otherwise, as it thinks

flt.

I further declare that having

voluntarily surrendered the unit the

Corporation has not taken possession

thereof so as to entitled me to any benefit

granted to hirers by Law.

DATED the twenty first day of July

1982.

Signed L. XLEIN

13/33-35 Xenyon St., Fairfield."

Mr. Staples also filled in and signed a form headed

"Receipt for Repossessed Goods". This was confusing.	It	was
apparently the only form used by G.M.A.C. whether a car was

repossessed surrendered. or Its terms were obviously

inappropriate for surrender. However, I find that the car was

surrendered in accordance with the	form	"Voluntary Surrender"
signed by Mr. Klein.

There are differences in the two accounts given as to

I

what was said and done at the interview between Mr. Klein and Mr.

Staples on 21 July 1985. I accept the account given by Mr.

Staples as substantially accurate. I believe that in his

account, Mr. Klein was confusing some of the matters discussed

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between him and Mr. Ritchie on	20 July	1982 and those discussed
with Mr. Staples.

After the car had been delivered to Ron Hodgson Motors,

Mr. Staples took the car and obtained from dealers four quotes

for the sale of the car. He also obtained a quote from Ron

Hodgson Motors. The car was sold to Ron Hodgson Motors for

$1700, however there was some recourse against Ron Hodgson

Motors, who forwarded to G.M.A.C. the sum of $2320.34. This sum

of $2320.34 was received by G.M.A.C. on 11 August 1982. It is

difficult on the evidence to fix the precise date of sale to Ron

Hodgson Motors. It seems to have been within about three days

after the original delivery to them on 21 July 1982. Mr. Ritchie

of G.M.A.C. was by 6 August 1982 aware the vehicle had been sold

to them, but he was not aware on the 28 July 1982 that the sale

had taken place. This led to a series of errors and

misunderstandings.

On 28 July 1982 Mr. Klein rang Mr. Ritchie and informed

him he wished to redeem the car. Eventually Mr. Ritchie, who was

then unaware the car had been resold, told Mr. Klein he could

have the car back provided arrears and expenses were paid, damage

fixed and the unit insured within two weeks. Mr. Klein said he

did not know if this could be done but would keep in touch. On 6

August 1982 Mr. Ritchie became aware that the vehicle had been

sold. He did not .. communicate at this stage with Mr. Klein.

However, on 11 August 1982, that is, 14 days after the

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conversation of 28 July 1982, Mr. Klein, accompanied by his wife,

visited Ron Hodgson Motors, and learned that his car had been

sold. He then rang Mr. Ritchie and said he had the money plus

the insurance money and said: "How do I get my car back now?" Mr. Ritchie said: "You don't because the car has been sold."

At that time Mr. Klein would have needed to be able .to

pay arrears of three instalments and also insurance, which he

said he had arranged with N.R.M.A. and for which $306 or some

such amount would be required. Mr. Klein was still out of work

and his wife's savings were reducing. Evidence of her savings

account with the Metropolitan Credit Union, which was tendered,

showed that although her credit balance on 10 May 1982 was $780

it was reducing while Mr. Klein was out of work. On 11 June her

balance was $140. On 12 July it was $254.81; on 16 July it was

$54.81; and, on 10 August it was $84.81. It is clear that by 11

August 1982 it would have been impractical for Mrs. Klein to

assist Mr. Klein by paying the amount of arrears out of her

Metropolitan Credit Union account, let alone the amount of

insurance. By 11 August 1982 the arrears had increased. On 13

August 1982 another instalment would become due. Some suggestion

was made about obtaining assistance from Mrs. Klein's mother, but

no evidence was offered to show how this may have been possible.

The confusion and misunderstandings between the parties

are unfortunate.- However, I am satisfied that Mr. Klein agreed

in the telephone conversation with Mr. Ritchie on 20 July 1982 to

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surrender the vehicle; that when Mr. Staples called on 21 July

1982 Mr. Klein signed the Voluntary Surrender form; and that Mr.

Klein then drove the vehicle to Ron Hodgson Motors to deliver up

possession of it. I do not consider that he was misled about

anything, when he did this. It is true a notice of repossession

dated 13 June 1982 had been sent to him, but his evidence is that

this did not reach him till after he had delivered up the vehicle

on 21 June 1982. By what took place on 20 and 21 June 1982 the

repossession procedure was superseded before the notice reached

him.

So far as Mr. Xlein's claim under the Trade Practices

Act is concerned, it does not appear to me that there was on the

part of G.M.A.C. conduct that was misleading or deceptive or was

likely to mislead or deceive within the meaning of 5.52; nor that there was on the part of G.M.A.C. in trade or commerce, in

connexion with the supply of goods any ,false or misleading

statement made concerning the existence, exclusion or effect of

any condition, right or remedy within the meaning of sub-s.53(g).

So far as Mr. Klein's claim under the Hire Purchase Act

is concerned, it appears to me that, although Mr. Klein was under

pressure from the circumstances arising from his unemployment, he

made a voluntary surrender of the vehicle on 21 July 1982 and has

no claim based on the Hire Purchase Act.

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Mr. Klein's later dealings with Mr. Ritchie on 28 July

and 11 August took place after the vehicle had been disposed of

to Ron Hodgson Motors. Both parties appeared to be acting on a

mistaken basis. This was unfortunate, but it does not appear to

me to alter the position which had been finalized by the disposal

of the car to Ron Hodqson Motors. I may add that I am not

satisfied that the disposal to Ron Hodqson Motors was	at	an
undervalue.

In the result I am of opinion Mr. Klein's claim must be

dismissed. I understand the parties wish to be heard on the

question of costs before I make a final order.

judgment herein of the Court

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