McLeod, C. G. v Gibrose Pty Ltd

[1988] FCA 188

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IN THE FEDERAL COURT OF AUSTRALIA	1
Q p	1 QLD G56 of 1986
GENERAL DIVISION	)

BFpwEEN:  COLIN GORDON McLEOD

Applicant

AND: GIBROSE PTP LTD

First Respondent

AND: P.L. PICKLES & CO PTY LTD

Second Respondent

MINUTES OF ORDER

JUDGE MAKING ORDER:	PINCUS J.
DATE OF ORDER:	7 APRIL 1988
WERE MADE:	BRISBANE
THE COURT ORDERS THAT:

1. the respondents pay to the appllcant the sum of

$4,000;

Order 36 of the Federal Court Rules.

2 . the respondents pay to the applicant h15 costs of

and incidental to the proceedings, to be taxed.

- NOTE : Settlement and entry of orders is dealt wlth In

IN “E F’EDERAL COURT OF AUSTRAL	IA	)
gUEF&SLAND DISTRICT RZGISTRY	) QLD G56 of 1986
GENERAL DIVISION	1

BETWEEN:  COLIN GORDON McLEOD

Applicant

AND: GIBROSE PTY LTD

First Respondent

AND: P.L. PICKLES & CO FTY LTD

Second Respondent

PINCUS J. 7 APRIL 1988

EX TEMPORE REASONS FOR JUDGMENT

This is a matter in which the applicant, Mr Colin

McLeod, seeks damages for infringement	of 55.52 and 53 of the
Trade Practices Act 1974. The applicant is a purchaser	of a motor

vehicle at auction, the vehicle being	an o l d	Sunbeam from	the
1920s.

.

The first respondent was the vendor and the second

respondent the auctioneer. The first respondent was represented

at a directions hearing which took place in J u l y 1986, but has not

subsequently taken part in the proceedings and Mr Sheaffe, on

behalf of the applicants, seeks judgment against the first

respondent in default of its having done so.

The second respondent has taken part in the proceedings

and has been ably represented here by Mr Watson. The case, in

essence, is simple enough, but	it involves questions on which
different minds might reach varying conclusions.	I have reached

firm conclusions on those matters and I think that it is right

that I should express them now.

The history of the matter is that the car in question

was displayed at premises called the Suncoast Pioneer Village

Museum for some considerable time, and in the display was

represented to be "originally from Government House," or "Late

Government House, Brisbane". It was put up for sale and the second respondent, a reputable company, caused to be prepared documents for the purpose of the auction.

The documents of which the applicant complains agalnst

the second respondent were two: in one of them, which was variously described during the hearing but which I will call a

booklet, the vehicle was lot 249 and was described as follows:

"1925 SUNBEAM LANDAULm, six cylinder engine, Conditlon: Original

and complete. This magnificent motor car was used as The

*	Queensland Governor's State	Car, and was garaged at Government
House.

In the other document of which the applicant complains a

briefer description was given. It was simply described as: "1926

SUNBEAM limousine (Vice-Regal, Brisbane)". Now, the applicant saw

an advertisement for the auction. He wrote away and he got back

the document to which	I have just referred, which	I shall call the
brochure which,	as	I mentioned, asserted that the vehicle in

question was vice-regal.

He had a look at the vehicle and noticed the signs

which, one might say, reinforced the message as to the vehicle's
history. However, although interested in the vehicle, he was

unable to bid for it personally because of the necessity of

travelling overseas on business. He gave instructions to his

brother, Mr Ronald McLeod, to bid and Mr Ronald McLeod did	so.
The brothers say, and it is not really challenged, that the
instructions were to go up to $15,000	OK so. In fact, Mr Ronald
McLeod decided to bid, and did successfully bid,	$15,750. He had
the booklet to which	I have referred, and which contalned the

description I have mentioned.

Now, it 1s not disputed that these descrlptions were

false. The vehicle was indeed a Sunbeam; it was not a Landaulet.

It presumably had a six-cylinder engine;	its condition was	not
original.	It was never used as the Queensland Governor's	car, and

was not garaged at Government House at all. There 1 s no

explanation as to how these errors came about, except a partlal

. one, and that is that the second respondent seems to have

elaborated somewhat upon the bald description of the history whlch

had been supplied by the vendor, the first respondent.

The counsel for the second respondent has argued that

the documents for which the second respondent was responsible had

no inducing effect. That appears to me to be unlikely, on the

face of it, and not to be so in fact. Obviously, any sensible

person would regard the fact that the car had belonged to the

Governor as adding interest to it, and the appllcant	so regarded
it.

A rather frivolous suggestion was made on behalf of the

second respondent, that the history of the car would have nothing

to do with its value. If that was so, one might inqulre why so

much emphasis was placed upon it in the booklet, being the

catalogue, which was admittedly prepared by the second respondent.

The other point taken by Mr Watson as to inducement was

that, based upon answers given by the appllcant, the sole

inducement was the inspection of the vehicle. I do not thlnk that

is so, and I find to the contrary. As Mr Sheaffe says, the

relevant misrepresentation does not have to be made by the second

respondent alone. In fact, in this case it was made flrst by the

second respondent, before the inspectlon took place, and I am

satisfied that the booklet was also induclng, In the mdlrect

sense, viz. that had lt told a dlfferent story, no doubt the agent

of the applicant would not have contlnued wlth the proposal to

buy, which he	was	to	carry	out	with the	authority	of	the
applicant.

In :  short, I am satisfied that the vehicle was

misrepresented by the s cond respondent, and that Its

misrepresentations were an inducing factor, although not the sole
inducing factor.

.

The second point which should be mentioned, taken by Mr

Watson, was that, on his contention, the second respondent merely passed on information given by the vendor, and should not have reasonably been understood to have been doing anything more. Mr Watson referred me to the dictum of the High Court in Yorke v.

Lucas (1985) 158	C.L.R.	661	at p.666, and in partlcular to the
sentence :

"That does not, however, mean that a corporation

which purports to do no more than pass on

Information supplied by another must nevertheless be engaging in misleading or deceptive conduct if the information turns out to be false."

The answer given by Mr Sheaffe is simple. He says the

second respondent did not, In fact, and dld not purport to do, more than pass on information as supplied by another, namely the flrst respondent. The High Court went on:

"If the circumstances are such as to make It

apparent that the corporatlon 1s not the source of the information and that it expressly or lmplledly disclaims any belief in its truth or falslty,

merely passlng it on for what	it is worth, we very
much doubt that the corporation can properly	be

said to be itself engaging In conduct that	1 s
misleading or deceptlve."
I can see	that an auctioneer who is responsible for

advertising articles said to be old or to have a particular origin

or history or provenance may have problems in carrying out his

primary commercial function of selling the vehicle at the best

possible price, while avoiding infringement of the law. It is

clear enough that he may do so; that is, the description may be

given and not vouched for, and that can happen, for example, if the auctioneer says: we are told by the vendor that the history of the article is o and so; we are unable to say whether that is

so.

However, statements of that sort, no doubt, would not

encourage purchasers, and one finds, in practice, that the strategy adopted is too commonly of the sort used by the second

respondent here. So far from suggesting, in the descrlption in

the brochure or the catalogue, that there was any doubt about the information supplied by the vendor that information was bolstered up and slightly exaggerated.

What Mr Watson ultimately relied on, then, was the

exclusion clauses in the documents. Three should be mentloned,

firstly, a document signed as buyer's ldentlficatlon sald:

"I understand that the Terms and Conditions of this

Auctlon Sale are dlsplayed and I acknowledge that if I am a successful bidder I will be bound to purchase the items in accordance with the Terms and

Conditlons. l'

Secondly, the terms and conditions, o far as I can make

them out from the rather mixed-up copy supplled to me, say, in
effect, that if the goods are not as described then nothing can be

done about it.

And thirdly, the booklet to which I have referred says

in the front, under the heading "CONDITION" :

"Reference to condition of items contained in this

catalogue has been supplied by the vendors."

That, in fact, was not altogether so wlth respect to the

vehicle in question. The notice went on -

"Interpretation of 'condition' is a matter of

opinion and intending buyers hould satisfy

themselves in this regard. In many cases we have

only seen a photograph and we cannot guarantee

whatsoever the description. Caveat emptor."

One comes, in the end, to the question which may be

generalised in this way: if, so far from merely passing on what

the vendor says, the auctioneer devises his own description,

elaborating upon and giving added weight to the more	skmpy
information supplied by the vendor, does the operation of the
statute fall because of what mlght be described as ordlnary	sorts
of exclusion clauses?

It seems to me clear enough, on the trend of the

authorlties, that it cannot do so. I do not thlnk the Hlgh Court

had in mind, in the passage to which I have referred, that a clalm

. under s.52 could be ordinarily defeated by "common or garden"

exclusion clauses, although the presence of such clauses may, in

particular circumstances, help to enable the respondent to obtain

a finding that the person allegedly in breach of	s . 5 2	was merely
passing on information for what it was worth.

It therefore appears to me that the applicant has

established liability in the second respondent, and it also seems

clear enough that the first respondent is liable. The next

question in the case which has to be considered is one wlth which

I have had some difficulty, and that	is the matter of assessment
of damages.

The evidence as to value has satisfied me that the price

being paid was probably above market at the time when it was paid.

However, that is of no consequence. The applicant was induced to

pay that above-market price by the very misrepresentations

complained of.	The more difficult point is to determine the
present value, and to determine whether	that present value should
be considered.

Mr Sheaffe has argued that the proper course 1 s slmply

to look at the value at the tlme of the purchase, whlch was 2 112

years ago, and compare that with the price then pald.	On	the
other hand,	Mr Watson has contended that since	It is common ground
that the value has increased substantially slnce	the	purchase,

that should redound to the benefit of the respondents.

If I accept Mr Watson’s contention in that regard, there

. is still left the question of the way in whlch the adlustment

should be made. It appears to me that it cannot be done with

mathematical precision, but that if it is fair to take present
value, some adjustment should be made for the decline in the value

of the money which was paid; that is, the money which would be

restored now is of less value than it would have been if restored

in September 1985, at the time of purchase.

.

On the whole, I think that Mr Watson's contention in

this respect should be accepted, and that the Court should attempt

to carry out the exercise I have mentioned, giving the respondents

the benefit of augmentation in value since	the purchase, but
taking into account against them the decline	m the value of the
money.

Mr Jacklin gave evidence that he thought the value of

the car at present was $18,000 to $20,000. The value of his

evidence, however, is somewhat diminished by the circumstance that

he is an interested witness. Mr Neville Webb also gave evidence

of value, and seems to me,	wlth all respect to	Mr Jacklin, to have
been perhaps more mpartlal.	Mr Webb's oplnion was that	the value

of vehicles of this sort mlght have increased by	something of the
order of 30 per cent in the 2 112 years smce the sale, whlch	1 s a

more substantial increase than the corresponding	declme I n	the
value of money.	I can only go	upon my mpressions, and a baslc

but dim understanding of the reasons why people purchase these

vehicles and the reasons for the lnterest In them I n the

community; I am of the oplnion that the applicant would be

adequately compensated by	an award of damages I n the sum of
$4,000

It will therefore be ordered:

1. that the respondents pay to the applicant the sum of $4,000;

. I . 10.

2.    that the respondents pay to the applicant his costs of and Incldental to the proceedings to be taxed.

1

, -e-tlfy t + , z 2nd 11-e 9 3 r ? c d n g

- -e? _I are a true ccpy cf the reasxs for

+-Tent herein of HIS Honour

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