Phillips v Ge Commercial Corporation (Australia) Pty Ltd - [2000] WADC 268

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: PHILLIPS -v- GE COMMERCIAL CORPORATION (AUSTRALIA) PTY LTD [2000] WADC 268

CORAM: REGISTRAR KINGSLEY

HEARD: 2 AUGUST 2000

DELIVERED : 13 SEPTEMBER 2000

FILE NO/S: CIV 745 of 2000

BETWEEN: JAMES RAYNER PHILLIPS
Plaintiff
AND
GE COMMERCIAL CORPORATION (AUSTRALIA) PTY LTD
Defendant

Catchwords:

Practice - Application for summary judgment - Misrepresentation as to pay out figure under the purchase agreement

Legislation:

Trade Practices Act, s 82 and s 87

Result:

Judgment for plaintiff in the sum of $39,209.91

Representation:

Counsel:

Plaintiff: Mr S D Hicks
Defendant: Mr T Coyle

Solicitors:

Plaintiff: Richard Huston and Associates
Defendant: Phillips Fox

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

Marks v GIO Australia Holdings (1998) 196 CLR 494

Case(s) also cited:

Australian Can Co Pty Ltd v Levin [1947] VR 332
Collings Construction Co Pty Ltd v ACCC (1988) 152 ALR 510
Commonwealth v Verwayen (1990) 170 CLR 394
Cordinup Resorts Pty Ltd v Terana Holdings Pty Ltd (1997) 143 FLR 18
Evans Deakin & Co Pty Ltd v Kaiser Engineers & Construction Inc [1968] Qd R 379
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87
Jacob v Booth's Distillery Co (1901) 85 LT 262
Wardley Australia Ltd v Western Australia (1992) 175 CLR 514

REGISTRAR KINGSLEY: This is the plaintiff's application for leave to bring an application for summary judgment pursuant to O 14 of the Rules of the Supreme Court. In September 1997 the plaintiff entered into a hire purchase agreement with Avco Financial Services to purchase a prime mover and trailer. As part of the arrangement the plaintiff paid a security deposit of $50,000.
The prime mover and trailer were insured. A term of the insurance agreement provided that where the motor vehicle is damaged the insurer would either repair, reinstate or replace the damaged parts, pay the loss or damage or replace the motor vehicle. Where the prime mover becomes a total loss within two years of manufacture the agreement further provided the plaintiff had an election to obtain a replacement where an equal model was available but payment would only be up to the maximum value of the sum insured.
If the plaintiff elected not to replace or an equal model was not available then the insurer would pay the market value or the sum insured. The sum insured in this case was $260,000 as pleaded in par 6 of the statement of claim. The prime mover and trailer were totally destroyed within the two years. The prime mover's market value was $182,400. The cost of replacement was $230,000.
The defendant represented to the plaintiff that the payout figure under the hire-purchase agreement was $209,000 odd. Acting on that representation the plaintiff accepted the market value of the prime mover. The plaintiff pleads that contrary to the representation the defendant now claims the payout is $248,221 and has deducted $39,209.91 from the security deposit. Thus the plaintiff pleads a loss under three headings; the sum of $39,209.91, the lost opportunity to elect to take a new prime mover and the lost opportunity to continue in business.
In his affidavit evidence sworn 15 May 2000, the plaintiff details the options he was faced after the loss of the prime mover and trailer. One option was to take a new prime mover and sell it immediately. The plaintiff considered this option but eventually dismissed the option as it did not seem an entirely correct procedure. Whilst the option was raised with the defendant, and this was put to the defendant by the plaintiff's financial adviser Simon Lyne, including the intention as stated by Lyne that it was the plaintiff's intention to retire, the option was not pursued. This is notwithstanding the defendant had given consent.
The plaintiff then considered taking the market value of the prime mover together with the insurance for the trailer and after deducting the original payout this would leave sufficient to discharge most of his debts. This was a concern of the plaintiff as evident in his affidavit. The plaintiff states at par 16 of his affidavit that if the payout was as subsequently represented by the defendant then the plaintiff would have taken a prime mover and continued working.
The payout figure the defendant originally stated was $259,000 on 9 August and on 10 August that was amended to the figure of $209,011. It was subsequently confirmed by the defendant on 25 August. The plaintiff pleads that the representations made by the defendant were misleading and in breach of s 52 of the Trade Practices Act. The plaintiff submits that whether damages are claimed under s 82 or s 87 the appropriate measure is the deduction made from the security deposit of $39,209.91.
On those facts I am of the opinion that the plaintiff has raised a prima facie case and having done that the onus falls on the defendant to show why judgment ought not to not be entered. I am also satisfied that there is no issue in relation to the question of leave.
The substantive issue raised by the defendant in an affidavit of Thompson sworn 3 July 2000 is that the wrong defendant has been named. It is deposed that the defendant and Avco Financial Services are subsidiaries of Avco (Australia). Thompson deposes that the defendant manages the hire-purchase agreement only, which Avco entered into using the business name Textron Financial Corporation. This is the contract the plaintiff entered into which is the basis of this claim.
The facsimile letter from the defendant to the plaintiff's financial adviser is stated to be from the defendant (previously Textron Financial Corporation). On any interpretation the addition of the words "previously Textron Financial Corporation" make it abundantly clear that at least there was an assignment of the hire-purchase agreement.
In any event the defendant is holding itself out as being entitled to receive payment and upon payment relinquish any interest in the hire-purchase agreement. I refer to the facsimile letters of 9 August and 10 August. I see no substance in the issues raised in the affidavit of Thompson.
The defendant has no issue with the fact that an incorrect figure was given. The issue is what is the loss? The defendant's counsel makes much of the conflict of evidence between the plaintiff and Simon Lyne as to what the plaintiff's intentions were in relation to his work.
One of the options suggested by the plaintiff was to take a new prime mover and continue working. Simon Lyne deposes that he had been told by the plaintiff that he had had enough of truck driving and wanted to get out. This is confirmed by the facsimile letter of 18 August where Lyne states "The plaintiff is intending to retire from the industry."
These comments, say the defendant's counsel, are not colloquial expressions but mean the plaintiff was intending to retire and hence the option to continue working is lost. Taken in context the comment of Lyne is made in relation to seeking consent from the defendant for the plaintiff to purchase a new truck and sell it immediately. It is an option that was not taken up by the plaintiff.
It is clear from the plaintiff's affidavit that he had a number of debts which were to be considered by him and these were part of the overall factual basis upon which he was making his decisions. The option of taking a new prime mover and to continue working was one of a number of options.
The defendant's counsel raised the issue that under the hire-purchase agreement consent of the defendant was required before the option of taking a new prime mover could have been taken up in any event. The onus is on the defendant to show that consent would not be given and there was no evidence from the defendant on this point.
The issue raised by the defendant's counsel is what is the legal basis for any loss suffered? The plaintiff's claim for damage falls under s 82 or s 87 of the Trade Practices Act. In Marks v GIO Australia Holdings (1998) 196 CLR 494 Gaudron J commented at par 12 that the terms "expectation" loss and "reliance" loss are misleading and irrelevant. As Gaudron J states, the issue is the acceptance that a loss sustained by breach of contract is of a different kind to that occasioned by the commission of a tort, thus the terminology signifies different kinds of loss, not different methods by which the loss is measured. According to Gaudron J, the task is to identify the loss or damage suffered and make orders for recovery of that sum.
In Marks v GIO, the majority Judges considered that the appellants did not establish they were worse off by entering into a refinanced agreement. In this case the plaintiff had a number of options; he states that as a result of the payout figure put forward by the defendant, he pursued one course. That was to take the market value of the prime mover. Having put that course of action into effect, which involved third parties in the payment of moneys, the defendant then stated to the plaintiff there was a higher payout figure.
In my opinion the plaintiff has made out a case that there is an identifiable loss suffered by that misrepresentation, and that identifiable loss is the sum of $39,209.91. I am of the opinion that the defendant has not put forward any arguable issue to dispel the prima facie case and accordingly I am prepared to enter judgment as sought in the summons.