Snowy Mountains Grammar School Ltd v Adventurer AWD Pty Ltd

[2021] NSWSC 1602

Supreme Court

New South Wales

Medium Neutral Citation:

Snowy Mountains Grammar School Ltd v Adventurer AWD Pty Ltd [2021] NSWSC 1602

Hearing dates:

7 – 8 June 2021; last submissions 2 July 2021

Date of orders:

17 December 2021

Decision date:

17 December 2021

Jurisdiction:

Equity - Corporations List

Before:

Rees J

Decision:

Judgment for the defendants.

Catchwords:

CONSUMER LAW – school buys a bus – some components date from 2012 – bus completed manufacture in 2016 – 2018 compliance plates – sold in 2018 as “new” – VIN numbers – Build Year – compliance plates – meaning of “new” vehicle – case law review at [19]-[32] – misleading and deceptive conduct by silence – reasonable expectation that dealer would disclose Build Year where material difference to Compliance Year – no causation – bus sold at substantial discount – school aware that bus was old stock – bus attractive for other reasons.

EVIDENCE – solicitors should not write the expert report: at [40].

Legislation Cited:

Acts Interpretation Act 1901 (Cth)

Australian Consumer Law, ss 2, 18, 29, 236

Motor Vehicle Standards Act 1989 (Cth), ss 3, 5, 7, 10, 10A

Motor Vehicle Standards Act or Vehicle Standard (Australian Design Rule – Definitions and Vehicle Categories) 2005 (Cth)

Supreme Court Act 1970 (NSW), s 75

US Code of Federal Regulations 49 CFR Ch V, Pt 565, App. C

Cases Cited:

2 Elizabeth Bay Road Pty Ltd v The Owners – Strata Plan No 73943 (2014) 88 NSWLR 488; [2014] NSWCA 409

Agnish Pty Ltd v Folio Invest Pty Ltd (No 4) [2020] FCA 120

Annand & Thompson Pty Ltd v Trade Practices Commission (1979) 25 ALR 91

Ashbury v Reid [1961] WAR 49

Australian Competition and Consumer Commission v Coles Supermarkets Pty Ltd [2014] FCA 634; (2014) 317 ALR 73

Australian Competition and Consumer Commission v Construction, Forestry, Mining and Energy Union [2006] FCA 1730

Australian Competition and Consumer Commission v Dukemaster Pty Ltd [2009] FCA 682

Australian Competition and Consumer Commission v Telstra Corporation Ltd [2007] FCA 1904; (2007) 244 ALR 470

Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640; [2013] HCA 54

Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60

Collier v Electrum Acceptance Pty Ltd (1986) 66 ALR 613

Commonwealth of Australia v Davis Samuel Pty Ltd (No 7) [2013] ACTSC 146; (2013) 95 ACSR 258

Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31

Fair Work Ombudsman v South Jin Pty Ltd [2015] FCA 1456

Fleetman Pty Ltd v Cairns Pty Ltd [2005] FCAFC 80

Forrest v Australian Securities and Investments Commission (2012) 247 CLR 486; [2012] HCA 39

Given v Pryor (1979) 39 FLR 437

Google Inc v Australian Competition and Consumer Commission (2013) 249 CLR 435; [2013] HCA 1

Heartland Motors Pty Ltd v Piatow [2016] NSWCATAP 78

Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1988) 39 FCR 546; [1988] FCA 40

Hollis v ABE Copiers Pty Ltd (1979) 41 FLR 141

HTW Valuers (Central QLD) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640; [2004] HCA 54

Hyder v McGrath Sales Pty Ltd [2017] NSWSC 1647

Ireland v WG Riverview Pty Ltd (2019) 101 NSWLR 658; [2019] NSWCA 307

Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564; [2000] FCA 1572

Miller and Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357; [2010] HCA 31

Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191; [1982] HCA 44

Qantas Airways Ltd v Transport Workers’ Union of Australia [2011] FCA 470; (2011) 280 ALR 503

R v Ford Motor Co Ltd [1974] 1 WLR 1220

R v Tannous (1987) 10 NSWLR 303

Rafferty v Madgwicks (2012) 203 FCR 1; [2012] FCAFC 37

Redmond Family Holdings v GC Access Pty Ltd [2016] NSWSC 796

Salvatore Coco v Westpac Banking Corporation [2012] NSWSC 565

Trade Practices Commission v Australia Meat Holdings Pty Ltd (1988) 83 ALR 299

Yager v The Queen (1977) 139 CLR 28; [1977] HCA 10

Yorke v Lucas (1983) 49 ALR 672

Category:

Principal judgment

Parties:

Snowy Mountains Grammar School Ltd (Plaintiff)
Adventurer AWD Pty Ltd (First Defendant)
Neil Bamford (Second Defendant)

Representation:

Counsel:
Mr D Tynan / Ms S Andrews (Plaintiff)
Mr M Zammit (Defendants)

Solicitors:
HWL Ebsworth Lawyers (Plaintiff)
VS George Lawyers (Defendants)

File Number(s):

2018/385055

Judgment

1. HER HONOUR: In May 2018, a school bought a bus for some $150,000 (the Bus). According to Motor Vehicle Standards Act 1989 (Cth), the Bus was a “new vehicle” with a “date of manufacture” of February 2018. The Bus was imported from The People’s Republic of China, where it had undergone a protracted design and manufacturing process, including because the standards which applied to vehicles supplied to the Australian market, the Australian Design Rules (ADRs), had changed. Production of the Bus appears to have proceeded in ‘fits and starts’, with the chassis manufactured in 2012, to which a Vehicle Identification Number (VIN) was attached. Several components of the Bus, including the engine, were also manufactured in 2012, while others were not manufactured until 2017. Compliance plates were affixed to the Bus in February 2018, after it was imported to Australia.

2. The school seeks declaratory relief that it validly rescinded the contract for sale. Failing that, the school seeks damages for misleading and deceptive conduct as the Bus was represented to be “new”. There is no doubt that the representation was made. The question is whether the representation contravened the Australian Consumer Law in the circumstances of the case. In the result, the defendants engaged in misleading and deceptive conduct by silence by failing to disclose that the Bus had completed manufacture in 2016. However, the school would likely still have bought the Bus because of its other features which were considered attractive: the Bus was available for delivery; was an AWD bus which was thought suitable for snow conditions, including reducing the need for teachers to put chains on the vehicle; and, the price of the vehicle was substantially discounted such that the school was effectively acquiring an AWD bus for the price of a 2WD bus.

VIN NUMBERS

3. Before turning to the facts, it is necessary to explain a few things which no-one at the school could have been expected to know at the time. This led to some confusion, which had not dissipated by the conclusion of the hearing. The first thing to know is the difference between a VIN number, “build year” and a compliance plate.

4. VIN requirements in Australia follow the US Code of Federal Regulations 49 CFR Ch V, Pt 565, App. C, entitled “Vehicle identification number (VIN) requirements”. Each vehicle manufactured has a VIN assigned by the manufacturer containing 17 characters. The first three characters identify the manufacturer and type of motor vehicle. The next five characters identify the attributes of the vehicle, for example, passenger car, bus or motorcycle.

5. The next character, which occupies position nine (9) in the VIN is a “check digit” which provides a means of verifying the accuracy of any VIN transcription. After all other characters in the VIN have been determined by the manufacturer, the check digit is calculated by carrying out a mathematical computation, which is not necessary to set out but, suffice to say, changing a character in the VIN will have the consequence that the “check digit” will no longer align with the result of this computation. This caused problems here: see [68]-[71], [114].

6. The next character in the VIN, occupying position ten (10) “shall represent the vehicle model year” where “Model year means the year used to designate a discrete vehicle model, irrespective of the calendar year in which the vehicle was actually produced, provided that the production period does not exceed 24 months”. The year is designated, relevantly, as “C” for 2012 and “G” for 2016. The next character represents the plant of manufacture and the remaining characters are a number sequentially assigned by the manufacturer in the production process.

7. According to the defendants’ expert, engineer Trevor Booth, the VIN is allocated to a bus before manufacturing commences as this is the control function for the quality assurance systems for compliance with Australian Design Rules. The VIN is impressed on the chassis early in the chassis manufacturing stage. According to the school’s expert, Stanislaw Biega, building the chassis is the first step in building a bus. (To assist the reader, a chassis is the basic operating motor vehicle including engine frame and other essential structural and mechanical parts but does not include the body or other items associated with accommodating passengers, appliances or equipment related to other than control: Vehicle Standard (Australian Design Rule – Definitions and Vehicle Categories) 2005). Here, the VIN number affixed to the chassis of the Bus had the letter “C”, indicating that the first step in manufacturing the Bus occurred in 2012.

BUILD YEAR

8. The contemporaneous documents and expert witnesses in this case referred to the “build year” or “build date”. The Build Year is not defined by the Motor Vehicle Standards Act or Vehicle Standard (Australian Design Rule – Definitions and Vehicle Categories) 2005 (Cth) but is when manufacture of a vehicle is completed. According to Mr Booth, in the ordinary course of events, the time between allocation of a VIN number and the bus leaving the production line is relatively short; a bus is completed when it is driven off the production line under its own motive power. According to the school’s expert, Charlton Dall’asen, it takes on average less than one year to build a standard specification bus.

9. Here, given the protracted design, manufacturing and compliance process, the Build Year was 2016. When the Bus was imported to Australia, the importer obtained approval from the Department of Infrastructure, Transport, Regional Development and Communications to better reflect the Build Year and change the tenth digit in the VIN from “C” to “G”. Whilst the school maintained that the defendants had “tampered” with the VIN number, this was not the case. However, whilst manufacture of the Bus was completed in 2016, a substantial portion of the Bus was manufactured some years earlier.

COMPLIANCE PLATES

10. The next thing to understand is compliance plates, which are affixed under a statutory regime established by the Motor Vehicle Standards Act. The purpose for the Act is to apply uniform vehicle standards to new vehicles to be used in transport in Australia: section 3(a). The Minister may, by legislative instrument, determine vehicle standards for road vehicles: section 7. One such instrument is the Vehicle Standard (Australian Design Rule – Definitions and Vehicle Categories) 2005. Section 10(1) provides:

Type identification plates

(1) The Minister may determine … procedures and arrangements for the placement of plates on road vehicles … if approval has been given under … section 10A … for plates to be placed on the vehicles ….

Perhaps confusingly, whilst the Act refers to “identification plates”, the Vehicle Standard (Australian Design Rule – Definitions and Vehicle Categories) 2005 uses the term “compliance plate” for plates referred to in section 10.

11. Section 10A(1) of the Act provides:

Approval for the placement of identification plates

(1)   If new vehicles of a particular type … comply with the national standards, the Minister must give written approval for identification plates to be placed on vehicles … of that type.

12. A vehicle standard determined under section 7 is a “national standard”: section 5(1). Australian Design Rules are national standards for vehicle safety, anti-theft and emissions and apply to vehicles imported and supplied to the Australian market. By my count, there are also some 98 Australian Design Rules addressing various aspects of motor vehicles such as headlamps, brake systems, side door strength and audible warning devices.

13. The Bus complied with national standards as approval was given for compliance plates to be affixed. According to Vehicle Standard (Australian Design Rule – Definitions and Vehicle Categories) 2005:

DATE OF MANUFACTURE – means the date the vehicle is available in Australia in a condition which will enable a ‘Compliance Plate’ to be lawfully affixed to the vehicle.

14. The compliance plate was affixed to the Bus in February 2018 and thus the “date of manufacture” of the Bus was February 2018. As Northrop J observed in Annand & Thompson Pty Ltd v Trade Practices Commission (1979) 25 ALR 91, “The date appearing on the compliance plate … need have no direct relationship to the date of actual manufacture or assembly of the motor vehicle”: at 105. According to Mr Dall’asen, large discrepancies may exist between when a vehicle is actually built and the manufacturer compliance date, with large discrepancies reducing the value of the vehicle. For buses and trucks, the build date can vary from manufacturer affixed compliance plates by one or more years.

15. Section 5(1) of the Act defines “new vehicle” as follows:

new vehicle means a locally made vehicle, or a new imported vehicle, that has been neither:

(a)   supplied to the market; nor

(b)   used in transport in Australia by its manufacturer or importer;

and includes a locally made vehicle, or a new imported vehicle, that has been supplied to the market but not yet used in transport in Australia.

16. Relevant terms used in the definition of “new vehicle” are also defined in section 5(1) of the Act as follows:

new imported vehicle means an imported vehicle that has not been used in transport outside Australia.

supply to the market … means deliver the vehicle to a person for use in transport in Australia.

use means … drive …

use in transport … means use the vehicle on a public road otherwise than:

(a)   to move it in order to:

(i)   have work done on it; or

(ii)   have it registered under a law; or

(iii)   protect it; or

(b)   for a prescribed purpose.

17. The experts agree that the Bus met the definition of a “new vehicle”. However, the statutory definition of a “new vehicle” in the Motor Vehicle Standards Act is of little assistance in understanding what “new” represented to consumers such as the school. A statutory definition exists for the purposes of the particular statute in which it is contained, unless it appears in a statute expressed to have a more general application, such as the Acts Interpretation Act 1901 (Cth): Yager v The Queen (1977) 139 CLR 28 at 43; [1977] HCA 10 per Mason J. As Franki J observed in Annand & Thompson, when considering claims for misleading and deceptive conduct when buying a car, “the trade meaning of ‘new’ is not directly relevant”: at 102. The definition in the Motor Vehicle Standards Act may, however, give context to how the defendants conducted themselves as it informed what the defendants understood to be a “new vehicle” and, thus, what they could and could not say about the Bus, and what they should add, if anything.

“NEW” VEHICLES AND THE AUSTRALIAN CONSUMER LAW

18. Section 29(1)(c) of the Australian Consumer Law relevantly provides that a person must not, in connection with the supply or possible supply of goods or services “make a false or misleading representation that goods are new”, where “new” is not defined. The school referred to the Cambridge Dictionary definition as “recently created or having started to exist recently” and the Collins Dictionary as “[s]omething … recently created, built, or invented or is in the process of being created, built, or invented.” I note the “familiar difficulty that dictionary definitions specify a range of meanings, rather than the particular meaning of the word in its context”: 2 Elizabeth Bay Road Pty Ltd v The Owners – Strata Plan No 73943 (2014) 88 NSWLR 488; [2014] NSWCA 409 at [81] per Leeming JA.

19. As Lockhart J observed in Hollis v ABE Copiers Pty Ltd (1979) 41 FLR 141, “It is not easy to define simple words of common use; but in my opinion the word ‘new’ where used in [section 29(1)(c)] … does not have a fixed and inflexible meaning for the purposes of the section applying to all cases irrespective of the context in which the representation is made. … [T]he meaning of the word is a question of fact in each case … Depending on the context in which the word appears, it may mean ‘not second hand’, ‘not old’, ‘of recent origin’, or ‘not excessively used’ … For goods to be new they do not necessarily have to be in ‘mint condition’ and the mere fact that goods are damaged, irrespective of the nature or quality of the repairs, does not mean that they have ceased to be new …”: at 147-148. In that case, a photocopier that had been on the showroom floor and used to make copies for prospective purchasers was still “new”: at 147.

20. Whether a car is “new” was considered in R v Ford Motor Co Ltd [1974] 1 WLR 1220, where a car manufactured by Ford was damaged on its way to a dealer, but repaired and sold as a new car. Bridge J gave the judgment of the Court of Appeal at 1227: (emphasis added)

That a car cannot be new once it has been the subject of a retail sale is obvious; then it is clearly in every sense a second-hand car. Whether or not it is an essential of newness that a car be a current model it is unnecessary to decide. That the use of the car must not be excessive is again clearly right in the sense that a car no doubt ceases to be new once the mileage it has travelled under its own power at all events significantly exceeds that to be expected as reasonably incidental to delivery from the point of manufacture to the dealer. It may not matter for the purposes of the present decision, but we must not be taken as approving the suggested criterion that a car cannot be new that is not in mint condition. If that is taken to mean that a new car must be faultless, well, regrettably, though it may be very desirable that new cars should be faultless, it is a matter of common knowledge that frequently they are not.

21. The Court of Appeal did not accept that a car ceased to be new as soon as it sustained any significant damage, irrespective of the quality of the repairs. In that event, the question was, first, what was the extent and nature of the damage and, second, what was the quality of the repairs effected. At 1228: (emphasis added)

If the damage which a new car after leaving the factory has sustained is, although perhaps extensive, either superficial in character or limited to certain defined parts of the vehicle which can be simply replaced by new parts, then provided that such damage is in practical terms perfectly repaired so that it can in truth be said after repairs have been effected that the car is as good as new, in our judgment it would not be a false trade description to describe such a car as new.

22. The question was considered in Annand & Thompson, where two Jeep motor vehicles were assembled in January 1975 then sold as “new” in 1977. The Jeeps, when sold, were still the current model and sold at the 1975 price. Franki J considered that the case law in respect of motor vehicles suggested “at least five possible meanings” of "new" when applied to motor vehicles, being essentially those referred to in Ford Motor Co (at 94-95):

(1)   That the vehicle has not been previously sold by retail, that is, that it is not a second-hand vehicle.

(2)   That the vehicle is a current and not a superseded model.

(3)   That the vehicle has not suffered significant deterioration or been used to any significant extent.

(4)   That the vehicle is of recent origin.

(5)   That the vehicle is one which has suffered a measure of damage but this damage has been quite effectively repaired, or any damaged part replaced, and the vehicle is otherwise new in every respect.

23. His Honour proceeded to consider, in some detail, the facts surrounding each purchaser’s acquisition of their respective Jeep. The sale to one customer was found to have involved no misleading and deceptive conduct where the vehicle was noted to be “new” on an order form in order to distinguish it from a “demo” or “used” car; where the order form contained a statement acknowledging that the vendor did not warrant the correctness of the year model; and where the application for registration of the car, signed by the purchaser, noted that the year of manufacture was 1975.

23. However, sale to the second customer contravened the prohibition on misleading and deceptive conduct where the salesperson referred to the car as a “1977 Jeep” when speaking to the insurer in the presence of the purchaser. In finding that conduct was misleading and deceptive for one customer but not the other, Franki J observed that it was “necessary to look at the whole of the transaction of sale and purchase and not only at one aspect of it”: at 102. The importance of context was emphasised with Fisher J, when agreeing with Franki J, at 114: (emphasis added)

… the word “new” has so many meanings, and standing alone is so ambiguous that reference to the context is invariably necessary to determine the sense in which it is used and whether its use in that particular context was misleading or deceptive …

… Here the question of whether or not the conduct is misleading or deceptive depends not so much on the use of the word “new” as the circumstances or context in which it was used. It is reasonably unlikely that any two situations would have been the same, and in many cases the word “new” would not have been misleading or deceptive.

The findings of Franki J, with which I agree, illustrate the point very clearly. …

25. In dissent, Northrop J considered “the use of the word ‘new’, when used in connection with the sale or purchase of a car or motor vehicle, is to be understood as meaning a car or motor vehicle which is a current model which has not previously been sold by retail”: at 111. His Honour specifically rejected the implication that “new” meant that the vehicle was “of recent origin”, being a concept which itself gave rise to difficulties of construction and application: at 113.

26. In Collier v Electrum Acceptance Pty Ltd (1986) 66 ALR 613, R v Ford Motor Co and Annand & Thompson were considered in the context of an aircraft. Woodward J observed, “Obviously, whether goods can properly carry the description ‘new’ must be considered in the specific context of their sale, lease, or other disposition. Where the goods have been damaged, the question must be one of degree and will depend on the goods involved, the extent of the damage and the nature of repairs required”: at 639. In that case, his Honour considered that the representation that the aircraft was new meant, at least, that it was very little used and in excellent condition, with no possibility of significant deterioration having occurred: at 639.

27. In Fleetman Pty Ltd v Cairns Pty Ltd [2005] FCAFC 80, a customer went to buy a new Saab and was told, “we can put you into a new 9-5 Griffin”. The customer test drove a demonstrator car and did not expressly ask if it was the latest model; the salesmen did not expressly represent that it was. The magistrate found that it was reasonable for the customer to infer that the vehicle was the current 2001 model. In fact, the car was the 2000 model. The Full Court agreed with the Magistrate’s conclusion that “in the context of the transaction as a whole, there would be a reasonable expectation in the mind of the [car dealer] that the fact that the vehicle was a 2000 model should have been disclosed to it, as the [customer] would reasonably have thought that it was purchasing the current ie 2001 model of the vehicle.”: at [7]. A demonstrator model was, by implication, a demonstrator of the current year. At [15]:

… The transaction concerned an expensive motor vehicle. The current model of the vehicle was the 2001 model. The appellant in October 2001 said it was a new vehicle (as it was) which had been used as a demonstrator vehicle. The features of the 2001 model were not significantly different from those of the 2000 model. However, the 2001 model had a significantly greater trade-in value than the 2000 model, and its depreciated value was also significantly greater than that of a 2000 model. Although the vehicle was registered in March 2001, the transaction took place in October 2001. … The fact that it was registered in March 2001 would not therefore clearly point to it being a 2000 model … [The customer] was believed when he said he thought it was the current 2001 model of the vehicle. The documentation relating to the sale did not itself indicate that the vehicle was a 2000 model. (The documentation ‘compliance plate’ information recorded the vehicle was an ‘01’ vehicle, although, as the evidence showed, that is reference to the date an imported vehicle is ready for certification in Australia rather than its date of manufacture or its model year.)

28. As such, the customer reasonably understood the vehicle to be the current model and the conduct of the car dealer in all the circumstances, including that it did not expressly indicate that the vehicle was not the current model, amounted to misleading or deceptive conduct: at [16].

29. Most recently, in Heartland Motors Pty Ltd v Piatow [2016] NSWCATAP 78, the customer purchased a Suzuki. The vehicle was manufactured in December 2013, had a compliance plate dated April 2014 and was the 2014 model. The car was purchased in 2015. The production and compliance date were disclosed on the front page of the “New Vehicle Contract”. After taking delivery of the car, the customer noticed the production and compliance date for the first time and requested the 2015 model or a refund. The customer contended that the dealer was obliged to disclose the age of the vehicle, especially if it was more than one year old. On appeal, the Appeal Panel considered that the finding that the Suzuki was not “new”, as it was “not of recent origin” given the production date and compliance plate date, was a finding that was open to the Tribunal: at [52]. The Appeal Panel noted that whether a vehicle is “new” is a question of fact rather than law: at [51].

30. The Appeal Panel was not satisfied that there was evidence capable of supporting a finding of a contravention of section 29 of the Australian Consumer Law as the dealer made no representation that the Suzuki was “new”. Failure to disclose did not amount to a representation that the vehicle was new, “There was no half-truth or statement made by the salesperson about the age of the vehicle, nor was there evidence of conduct, such as silence in response to a direct question or positive assertion about the vehicle”: at [79].

31. However, section 18 was considered to be broader as it applied to conduct: at [57], [64]. The findings of fact made by the Tribunal were capable of supporting a finding of conduct which was misleading and deceptive. At [77]: (emphasis added)

The critical questions were whether the conduct of the sales person and the circumstances as a whole were capable of creating the impression that the Suzuki GLX was the 2015 model and whether the sales person knew or ought to have known this was Mr Piatow’s expectation. In our view, the matters relied on by the Tribunal … are capable of supporting such a finding. There was also evidence Mr Piatow was given little opportunity to review the second agreement and even though the production and compliance plate date were recorded in a section on the front page, they were not in a prominent position or in bold or enlarged print. These matters were known to the sales person who was dealing with Mr Piatow.

32. Thus, what is meant by a “new” motor vehicle has proved a surprisingly subtle question with the criteria listed by Franklin J in Annand & Thompson continuing to capture relevant considerations. Whether a vehicle salesperson has engaged in misleading or deceptive conduct by failing to point out that a “new” vehicle is not the current model or was manufactured some time ago turns, in each case, on close examination of the evidence in respect of the particular sale. One cannot simply apply the conclusion in one case to another without careful analysis of the facts in each case. Where the cases to which I have referred largely concerned cars manufactured by large-scale producers for personal use, other considerations may be relevant to the sale of a commercial bus where the manufacturing process appears from the expert evidence to be more bespoke and protracted (Mr Dall’asen spoke of “on average less than one calendar year”), involving specialist dealers and customers who, necessarily, are not buying the family car.

WITNESSES

33. Turning to this case, no less than six lay witnesses and three expert witness gave evidence. The school relied on the evidence of principal Andrew Bell, finance manager Christine Dicker, former business manager Elizabeth Heath, director Andrew Brown, teacher Kelli-Rae Wilson and a former employee of the importer of the Bus, Automotive Holdings Group (AHG), Francis Burdock.

34. No credit issues arose with the school’s staff. Some volunteered comments which they perceived may assist the school’s case (Ms Heath and, to a lesser extent, Mr Bell) and were not entirely responsive to questions which might damage that case (Ms Heath). Mr Bell was obviously a busy person who was likely not involved in the detail of the acquisition of a new bus at the time. He did not necessarily open emails in relation to the purchase of the Bus, “But that's not unusual. I have many thousands of emails unopened that I can't get to …” Mr Brown was a perfectly decent fellow who gave evidence in a clear and precise manner and made reasonable concessions. Ms Dicker was not cross-examined at any length.

35. The school brought this case because of information conveyed to them by Mr Burdock, who said he resigned from AHG as the second defendant, Neil Bamford, falsely accused him of incorrectly claiming credit card expenses of his employment. Whilst Mr Burdock denied the allegations, he decided to “just resign and to move on” as he no longer wished to work with Mr Bamford. According to Mr Bamford, he discovered that Mr Burdock had been using the company credit card for personal expenses and confronted Mr Burdock, who admitted it. Mr Burdock signed a deed of release, agreeing to waive his right to four weeks’ notice and, in specified circumstances, to repay all unauthorised sums. Mr Burdock now works for a competitor.

36. Mr Burdock accepted that there was “potentially” some animosity between himself and Mr Bamford as a result of this but “it’s been a long time since then, sir”. Whilst Mr Burdock may have felt more sanguine about Mr Bamford by the time of the hearing, it is apparent from the contemporaneous documents that he was keen to damage Mr Bamford at the time, including by telling the school things that were either not true or which he could not be sure were true in order to advance his own interests of selling the school another bus: see [105]-[107]. Both in his affidavit and cross-examination, Mr Burdock referred to matters about which he could not know because they had happened long before he joined AHG, or were wrong. Mr Burdock’s evidence was, on occasion, evasive and inconsistent. I have approached his evidence with caution.

37. A secondary problem with Mr Burdock’s evidence is that the school’s witnesses were suitably incensed by the fact – which was not a fact – that the school had been sold a bus made in 2012. Their affidavit and oral evidence was thus put in more strident terms than may have been the case if they had known all the details, and made it difficult to assess what they would have done at the time.

38. The defendants relied on the evidence of Mr Bamford, who was articulate, well-prepared and keen to explain how the importation of cars to Australia worked. He had a finance background and was brought into AHG’s predecessor, the White Motor Corporation (Australia) Pty Ltd, to deal with various management problems. Mr Bamford did not have a background in the automotive industry and, when addressing the problems encountered with the buses, was guided by AHG technician Brett Hunter and engineer Mr Booth. Whilst I do not accept Mr Bamford’s evidence in all respects (see [60], [63], [97] and [98]), I have preferred Mr Bamford’s evidence to that of Mr Burdock where there is a direct conflict.

39. Turning to expert witnesses, the school relied on the evidence of Mr Dall’asen, who operates a retail and wholesale motor vehicle dealership with an emphasis on commercial vehicles and light to medium trucks and buses. He was slightly prone to exaggeration. The school also relied on the expert opinion of Mr Biega, also a motor dealer specialising in buses and coaches. By trade, he is a bus and coach body builder, mechanic and spray painter and has built many buses, but not since the 1970s. Since then, he has sold over 3,000 buses and coaches of which half are used and half were “brand new”. In short, both were motor vehicle dealers.

40. I cannot help but notice that Mr Dall’asen and Mr Biega’s reports may have been drafted by the school’s solicitor. This is apparent from the wide discrepancy between these witnesses’ oral presentation and the wordsmanship of their reports, together with the use of the apparently standard font, layout and footers of the plaintiff’s law firm. As this matter was not raised in cross examination, I have proceeded on the basis that the reports nonetheless reflect Mr Dall’asen and Mr Biega’s views, but it is most unfortunate.

41. The defendants relied on the evidence of Mr Booth, a mechanical engineer with 58 years’ experience. Over his career, he has worked with General Motors and British Leyland before commencing his own business in 1975. He has undertaken specialist vehicle design across a broad range of vehicles including buses. Mr Booth operates a test facility accredited by Vehicle Safety Standards (commonly referred to as road vehicle certification system or RVCS), being the authority responsible for the approval process necessary to supply vehicles to the Australian market. RVCS is administered by the Department and grants approvals to affix compliance plates to vehicles. Mr Booth conducts tests on motor vehicles and their components in accordance with the Australian Design Rules to enable fitment of compliance plates. He has been a member of a number of industry committees, including the Standards Australia Engineering Committee. Mr Booth was a perfectly decent fellow who gave evidence in a very clear manner. Mr Booth made reasonable concessions, was very knowledgeable and accurate. He appeared absolutely honest, was an impressive witness and I accept his evidence.

FACTS

42. The precise corporate entities involved in developing and importing the Bus are not clear. As nothing turns on this, the imprecisions which follow should be politely overlooked, where I have chosen between competing options.

Designing a 4WD bus

43. In 2005, Mr Booth became involved in the design testing and certification of buses manufactured in China. In October 2010, Mr Booth was commissioned by the Brahman Motor Company to design a bus body for a four wheel drive (4WD) bus. From November 2010 to January 2011, Mr Booth designed the bus body and assisted with chassis design to modify a rear wheel drive bus chassis to 4WD.

44. Dongfeng Commercial Vehicle Co Ltd is one of the big three auto makers in China, selling over 450,000 commercial vehicles and over 3.5 million cars each year. Mr Booth spent January 2011 at a Dongfeng factory in Shiyan, China to finalise the design in conjunction with the factory engineering team. In April 2011, Mr Booth attended the factory again to oversee construction of a hand-built prototype body but resigned from the project before the design was completed. At the time, a prototype chassis was being assembled and the prototype body was being build. Mr Booth agreed that the chassis he designed for the Brahman Motor Company ultimately became the buses imported by AHG.

Making buses for “Brahman”

45. Although Mr Booth ceased to have any involvement with the bus, some buses were completed and imported to Australia by Brahman Motor Distributors Pty Ltd under the “Brahman” brand. (Whether Brahman imported more than the prototype is unclear.)

46. In China (and presumably elsewhere), manufacturers buy large quantities of parts in order to keep the price of motor vehicles down. Based on his 14 years’ of visits to Chinese bus manufacturing plants, Mr Booth said that component parts are delivered in secure packaging such as plastic bags and the cardboard cartons; the parts need to still be in a serviceable condition when installed in a particular vehicle. Parts are stored for long periods to satisfy demand, including to meet the requirement to hold spare parts for seven years after manufacture of a vehicle has ceased.

47. Consistently with this, the experts identified a number of components on the Bus dating from 2012, that is, the components were manufactured then although not necessary installed on the Bus. The windscreen was manufactured in June 2012. The transmission was manufactured on 21 June 2012. The electrical relay in the luggage compartment of the Bus is dated 20 July 2012. The fuel rail manifold was manufactured on 24 July 2012. (If it was fitted to the Bus in 2012, then Mr Dall’asen was of the opinion that the seals used to mount it to the engine and injectors would be hard and have perished by the time of sale.) The build date for the engine in the Bus was 21 August 2012. (Mr Booth said that bus builders buy engines in bulk; Dongfeng purchased about 100 engines for this project.) The air conditioning compressor of the Bus is dated 17 September 2012. The seatbelts were manufactured on 23 October 2012. The luggage compartment lid support strut of the Bus is dated March 2013. However, further components manufactured in 2016 and 2017 are referred to at [68].

48. Brahman identified significant modifications and component upgrades after extensive testing of a prototype in Western Australia. In evidence is a list of 87 problems, together with Dongfeng’s “Solution and Status”. Mr Bamford explained that this was a list prepared by Peter Clarke from “Brahman”.

49. It thus appears that Brahman imported a prototype to Australia which, after testing, was considered to require significant modifications. Meanwhile, Dongfeng had acquired the components for the bus and undertaken some assembly, at least, of the chassis of the Bus. As earlier noted, a VIN number was impressed on the chassis of the Bus including “C” for 2012: see [6]–[7].

Modifying the bus for White Motor Corporation

50. White Motor Corporation (Australia) Pty Ltd was part of AHG. White Motor Corporation imported buses manufactured in China by “Higer” and “JAC” for distribution in Australia. In 2013, Mr Bamford was employed as the General Manager of White Motor Corporation. By September 2014, it appears that Dongfeng and Brahman Motor Distributors were no longer doing business together. Mr Bamford said that AHG took over the Australian importation and distribution rights of buses manufactured by Dongfeng. The corporate entity involved appears to have been WMC Bus Pty Ltd, wholly owned by White Motor Corporation.

51. On 1 September 2014, White Motor Corporation and Dongfeng entered into a Cooperation Agreement and Sales Contract. Mr Bamford signed both documents. The Cooperation Agreement was directed to the task of obtaining an import licence, with Dongfeng to supply “full and correct test results for ADR compliance”. Modifications appeared to be needed to comply with Australian standards, and the Cooperation Agreement dealt with who would undertake these tasks and how the costs would be shared. The agreement provided:

[White Motor Corporation] understand this deal of 26 buses are inventory vehicles, and purchase inventory vehicles without objection. Until this contract has been completed and these 26 buses have been exported and retailed in Australia, [Dongfeng] agrees not to export any Brahman Buses (or any other name for the 4WD bus in respect of this contract) to the Australian market.

Mr Bamford agreed that “inventory vehicles” was a reference to vehicles that were in stock. Whether “inventory vehicles” were partially or fully assembled vehicles is unknown.

52. By the Sales Contract, White Motor Corporation agreed to buy 26 off-road buses for USD $70,000 each, with shipment in four batches. The first batch was one unit, the second and third batches were 8 units each and the fourth batch was 9 units, with delivery “after the vehicle pass the inspection”. The Cooperation Agreement sheds more light on the batches: the first unit was a sample bus; once approved, White Motor Corporation would pay for the sample bus and a 20% deposit on the second batch of eight buses.

After [White Motor Corporation has] inspected first 8 buses and they were OK, [White Motor Corporation] will pay the balance to [Dongfeng] … If after inspection of the buses [White Motor Corporation] determines the buses have not been rectified to the agreed standard, [Dongfeng] must rectify any problems to the satisfaction of [White Motor Corporation].

53. Rectification was to include 92 changes already provided by Brahman’s quality control manager together with any further issues raised by White Motor Corporation’s quality control manager. Mr Bamford explained that AHG identified modifications and upgrades required to meet the current Australian Design Rules, apparently using Mr Clark’s work as a basis. The modifications and upgrades were significant and included changes to the front and rear axle to incorporate Anti Lock Brakes (ABS) braking capability. The extent of the changes from the original bus were so significant that the Australian Government required the manufacturer to re-do the full ADR test and undertake an inspection by the Australian Government to confirm ADR compliance. Prior to completion of manufacture, shipment and delivery of the buses, each bus was required to undergo these modifications and component upgrades. This included the Bus.

54. In December 2014, Mr Booth was approached by AHG with a view to reviving the 4WD bus project, in particular, to update the bus to current and pending Australian Design Rules. Mr Booth was to check all test reports currently held by the manufacturer, identify any deficiencies in the test reports, and to advise on and supervise any additional testing to be carried out for a new bus. Mr Booth recommended certain modifications be made to the bus to improve quality and to comply with current Australian Design Rules including improved seating, interior trim, noise suppression and ABS.

55. Mr Booth referred to the original bus as “Series 1” and the new bus as “Series 2”, “Just for my own … purposes, because there was a lot of differences between the two.” A lot of work was done on noise suppression in the engine cover. The “Series 2” bus had to be fitted with ABS brakes, which meant a total revision of the braking system. The emergency exits were in different locations. The seats and seat anchorages also needed to be updated to comply with the Australian Design Rules.

56. Whether one refers to the buses as “Series 1” and “Series 2”, as I understand it, AHG was taking the buses which had been made, or partially made, for Brahman but requiring a large number of changes to be made before importing the buses to Australia. In evidence is a list of 22 problems, dated 23 March 2015, together with Dongfeng’s proposed solution and White Motor Corporation’s comment. The document is signed by Dongfeng and Mr Bamford on behalf of White Motor Corporation. It would appear that the 87 problems identified by “Brahman” (see [48]) had by now been resolved in part.

57. In May 2015, Mr Booth attended the factory in Shiyan with a view to inspecting the bus and carrying out testing. In evidence is a Test Inspection Program for the Dongfeng 4x4 bus for May 2015 and a letter from Dongfeng to Mr Booth, authorising him to act as Dongfeng’s agent to obtain import approval and to deal with inspection issues. Mr Booth said there were then two prototype buses in existence, one of which was the test bus and the other was a “sample bus” for fit and finish quality checking. There were then no “Series 2” production buses in existence. Mr Booth said the prototype “Series 2” bus had various issues and he was unable to finalise the brake and noise testing.

58. Whilst at the factory, Mr Booth also saw several of the bus chassis, all new and under covers within the factory building, being chassis originally constructed for Brahman; some chassis were complete with engine and drive train while others were not. The Bus’ chassis may well have been one of the new chassis that Mr Booth viewed in 2015. Mr Booth observed engines on pallets and wrapped in plastic. It is probable that the engine used in the Bus was one of these. Mr Booth also noticed five or six completed “Series 1” buses parked in a compound (which I presume means outside). Mr Booth does not know where those buses went.

AHG takes over

59. In October 2015, WMC Bus went into administration. On 14 October 2015, Mr Bamford attended a meeting with Dongfeng in Shanghai. According to the minutes, Mr Bamford introduced AHG to Dongfeng “because WMC Company is to be closed down and … AHGI Company will undertake all prior business of WMC Company with Dongfeng.” The Cooperation Agreement was terminated. According to the minutes, Dongfeng agreed to update and complete test reports according to the Australian Design Rules. Mr Booth was to come to China later that month to complete brake testing, this being the last matter to be rectified following the importation of the sample bus. “After ADR certification has been completed, AHGI Company shall promptly pay Dongfeng the advance payment of 8 vehicles, and form purchase order by way of 8+8+10 according to prior agreement as soon as possible.”

60. Mr Bamford said that, when the 2014 contract with Dongfeng was terminated, he assumed that the buses that were the subject of those contracts were sold to other parties. Dongfeng told him that they had a Russian buyer for the buses and, if White Motor Corporation did not want to proceed, then Dongfeng would sell the buses to that buyer. On entry into the new agreement in 2015, the timing for the delivery of buses contained in the 2014 contract continued to be used in the 2015 agreement “just for ease of documentation”. He did not agree that, by the new agreement, AHG agreed to purchase the same 26 buses as in the 2014 contract. Mr Bamford’s evidence on this topic does not accord with the contemporaneous documents and I do not accept his evidence in this regard.

61. According to Mr Booth, brake and noise testing was completed on 28 November 2015. On 7 December 2015, a Road Vehicle Descriptor was completed for the vehicle. A further test was conducted on 5 January 2016.

62. In late 2015 or early 2016, Mr Burdock travelled to China and visited the Dongfeng factory to see whether the modifications required on the buses were being implemented. Mr Burdock was then employed by White Motor Corporation and AHG as National Sales and Marketing Manager. He inspected a number of buses, which appeared to be complete, that is, ready to be driven. The buses were stored outside the factory in an uncovered area and he believed the buses had been there for a long time as there was grass growing around the wheels. Mr Burdock said that he viewed “roughly 26” buses outside in the carpark and “was led to believe by [AHG’s quality control person] and Dongfeng that that was the order that we had placed. … they were our buses.” According to Mr Burdock, Dongfeng’s representative said, “We’re going to take you outside to show you … the buses”. I have treated this evidence with caution, including because it is perhaps uncanny that, three years later, Mr Burdock remembered exactly the same number of buses sitting outside as the number referred to in the Cooperation Agreement and Sales Contract.

63. On 10 March 2016, AHG and Dongfeng entered into a Cooperation Agreement and Price Supplement. As I read the documents, they dealt with remaining issues of testing and price for the 26 buses originally agreed to be purchased in 2014. By the Cooperation Agreement, Dongfeng agreed to complete the updated certification test reports by 18 March 2016, failing which AHG would do the tests in Australia at Dongfeng’s cost. The price of the buses was further discounted by USD$10,000, with AHG to buy the remaining 25 buses “in the way of 8+8+9 model” of batches. The Price Supplement noted: (emphasis added)

On the basis of the original price of US$80000 per unit, [Dongfeng] will give [AHG] each bus US$ 10000 of the business discount and US$10000 warehouse age discount. After the completion of the discount, the two parties will perform the contract price of $60000 per unit for the remaining 25 buses.

Mr Bamford said he understood that the “warehouse age discount” to relate to the parts used on the buses. I expect the “warehouse age discount” reflected the fact that production of the buses had begun in 2012 and it was now 2016. More than just the parts, the buses, in various states of assembly, had existed for some time.

64. In addition, on 18 March 2016, a Sales Contract was executed between Dongfeng and AHG, signed by Mr Bamford for 25 buses. Various commercial invoices were also issued by Dongfeng to AHG. On 20 April 2016, Dongfeng issued an invoice to AHG for a bus. Mr Booth said this was the “Series 2” prototype, although the model number for the vehicle was the same as for the March 2016 invoices. The “Series 1” and “Series 2” delineation, while used by Mr Booth, did not involve a new model. The bus was likely the sample bus referred to in the documentation, being the sample for the 26 buses which AHG had agreed to buy with significant rectification work undertaken since the buses were imported into Australia by “Brahman”.

Approved for importation

65. On 15 June 2016, the Department issued a vehicle import approval to Dongfeng for a vehicle for the purpose of testing. According to the letter of approval, the “Year” of the vehicle was 2012. A further test was conducted on 24 June 2016, as a result of which all issues which Mr Booth had identified were now corrected and testing was complete. Mr Booth said production of the “Series 2” bus could commence. On 9 August 2016, the imported prototype “Series 2” bus was inspected by RVCS. Prior to inspection, all of the supporting evidence of testing was lodged with the Department. The inspection report of the inspectors is in evidence. On 2 September 2016, approval was granted by RVCS to allow a compliance plate to be affixed with approval number 47746.

66. On 7 March 2017, the Department of Infrastructure and Regional Development approved the importation of seven buses to Australia. The “Year” of the bus was now noted as 2016, which I take to be the Build Year. It would appear that this was the second batch of buses. It would also appear that the Department recognised that the buses had completed manufacture in 2016.

A problem with VINs

67. By June 2017, Dongfeng was preparing to export a further nine buses to Australia. It would appear that this was the third batch of buses. Emails ensued with the Department and AHG to obtain an import permit for the buses. On 26 June 2017, import approval was granted, being for the import of “new vehicle[s]” including one with a VIN ending “264”, being the Bus. According to the letter issued by the Department, the “Year” for the vehicle was 2017, being the “Build Year”. That is, the Department recognised that the Bus completed manufacture in 2017.

68. As to when the Bus was completed, the actual build date of the Bus is not known. Mr Booth said the chassis of the Bus was brought up to 2017 standards before fitment of the body. This entailed fitting ABS and some modification to the exhaust system and drive train. The brake components on the Bus (being the four ABS brake valves) have a date code of 2016.09.03, which I take to be 3 September 2016 (the components appear to have used the American date system). Mr Booth said this indicated that the Bus could not have been built prior to that date. (Less significantly, the spare tyre was manufactured in January 2016. The two rear tyres were manufactured in June 2017.) Mr Booth considered the build date of the Bus was sometime after September 2016 having regard to the date of manufacture of the brake components and, likely, was built a short time before the Bus was imported to Australia.

69. On 12 July 2017, the Department sent an email to Dongfeng advising that there was a problem. The National Exchange of Vehicle and Driver Information System (NEVDIS) advised that could not load the VINs for registration “as they are incorrect”. Further, “NEVDIS has advised that the VINs are decoding as a 2012 year of manufacture and not a 2017. Please have your VIN[s] checked and supply the correct VIN[s].” Dongfeng advised AHG, “You need to change the manufacture date to 2012 and not 2017.” AHG’s technician, Brett Hunter replied, “When were the buses finished building? … [Dongfeng] were still working on these buses in 2017 for the SUTI [Single Uniform Type Inspection, or the prototype] requirements. The chassis may be from 2012 but the final bus is 2017??. … I think you need to email the [Department] and ask them about the chassis being 2012 but the final bus being from 2017. Tell them the VIN’s are correct …”. Mr Hunter prepared a draft email from Dongfeng to the Department as follows:

I think just reply … and tell them the facts and ask how to change from here. …

1   the chassis’s were all built 2012.

2   all the VIN’s are correct and they are from 2012 but I can not change the VIN’s.

3   all the buses body building’s were finished in 2017 hence the 2017 build date on the application.

…

70. On 13 July 2017, Tina Zhang of Dongfeng replied to the Department:

It was our mistake lodging the wrong “manufacture year” as 2017 which should be 2012 according to the VINs for those 9 vehicles.

We had Import Approval for previous 1+7 (two batches) vehicles which have the same manufacturer year 2012, the document lodgment was right with the year. NEVDIS had no problem to load the VINs in their system.

71. That is, Dongfeng disregarded the draft prepared by AHG. However, as I understand Mr Booth’s evidence and the Australian legislative regime already described, Mr Hunter was correct; the Build Year of the Bus was 2017. In any event, on 18 July 2017, the Department issued an amended import approval to Dongfeng, amending the “Year” to 2012 as requested by the manufacturer (this contributed to significant confusion in due course). The buses were loaded in Shanghai on 26 July 2017 and arrived in Port Kembla.

School wants a bus

72. Not unlike the manufacturing process, the school’s purchase of the Bus also proceeded in ‘fits and starts’. In September 2017, the Finance Committee of the plaintiff, Snowy Mountains Grammar School Ltd, decided to explore the possibility of buying a bigger bus. According to minutes of meeting, the acting principal “noted the importance of this larger bus remaining able to be driven (including snow conditions) as a light rigid licence rather than not increase to a medium rigid licence.”

73. The school’s business manager, Ms Heath, attended a conference in Sydney where AHG had sponsored a “Higer” stand, manned by Mr Burdock. Ms Heath looked at a Higer bus on display. Ms Heath said the school was looking to buy a new bus and asked for a quote. On 3 October 2017, Mr Burdock sent Ms Heath three quotations, being used, ‘demo’ and “brand new from the factory”. The quote for a new Higer bus was $127,515, after a discount of $10,000. Ms Heath advised Mr Burdock that she would take the information to the next board meeting and asked a series of questions directed to the quotation for a new bus. Ms Heath also asked for any promotional material to show the board and, whilst Mr Burdock suggested that she go to the website, “it’s all on there”, Ms Heath asked if he could send a link to the correct vehicle, “They literally all look the same to me.” Mr Burdock obliged.

74. Also in October 2017, Mr Burdock prepared a quotation for Greyhound Buses for an AWD Higer bus, being for one of the buses manufactured by Dongfeng. The quote, issued by AHG under the heading “Higer”, noted the Build Year and Compliance Year as 2016. As I understand it, AHG was selling these buses as “Higer” buses, at least to Greyhound Buses. This would appear to have been one of the second batch of buses, with the “Year” and compliance year as earlier described: see [65], [66]. Although Mr Burdock vehemently denied inserting the Build Year on the quote, it is likely that he did where it complied with the details approved by the Department.

75. A line-by-line comparison of the quotes prepared by Mr Burdock in October 2017, both to the school and to Greyhound Buses, and the quotation prepared by the defendants for the school in 2018 suggests that AHG was selling buses manufactured by Dongfeng as “Higer” buses.

Another problem with VINs

76. On 24 October 2017, Mr Hunter provided Mr Bamford with the VIN numbers for the third batch of nine buses, including the Bus. AHG was then in the process of selling the buses to Greyhound Buses for use in the mining industry. Mr Bamford sent an email to Ms Zhang, copied to Mr Burdock, noting that Greyhound Buses “does not want a 2012 manufacture date on the manufacturer plate”. Mr Bamford wrote:

We spoke to Trevor [Booth] to find out what we can do and he informed us that we can remove the Manufacturer Plate when we issue the Compliance Plate. We can ask DongFeng to cancel the previous VINs issued to the Australian Government and to issue new VINs in the same form as previously done when they were imported, with a G replacing the C. G relates to 2016 manufacture.

Can you please let me know if [Dongfeng] are happy to do this and we can discuss next week how we will put this in place.

77. Ms Zhang replied that she was not sure about this as replacing a VIN number on a frame meant cleaning the old number off, re-painting the frame and printing the new VIN on the frame. Further:

[I]n China, this behaviour is not allowed by law. I believe it should [be the] same [in] Australia. If Australia Government accept this, we can provide the new VIN number and cancel the previous VINs issued to the Australian Government and to issue new VINs.

78. Mr Bamford assured Ms Zhang that changing the VIN was “not a problem”. Ms Zhang replied, “If we can do it, we are happy to do this.” Ms Zhang was obviously concerned about Mr Bamford’s request, advising that she had discussed the matter with a colleague, who had suggested that it would be “hard to persuade the import application Dept. How [can] we explain?”.

79. Mr Booth said that there is a procedure by which a VIN number can be changed. The manufacturer has to agree. Such a change must be approved by the Department, which would need to be provided with documentation and the reason why the change was sought. In agreeing to change the VIN number, the Department relies on representations from the manufacturer and importer. In Mr Booth’s experience, the documentation needs to be “very robust”.

80. Presumably having obtained an explanation sufficient to allay her concerns, on 25 November 2017, Ms Zhang sent an email to the Department advising that Dongfeng had imported 17 buses in two batches in March and June 2017. Further: (emphasis added)

Vehicle Model was newly approved under CPA 47746 in 2016.

We OEM modified these 17 stock buses before delivery according to the newly approved CPA to keep the production conformity.

But VINs for these 17 buses were left with Manufacture Year 2012 on 10th Digit. This concerns us so we hold the registration of these 17 buses in Australia up to date since importation.

Please your kind assistance with the correction of 17 VINs in your system as to below information, so NEVDIS can update accordingly …

81. On 1 December 2017, Mr Bamford requested an update from Ms Zhang on the new VIN numbers, “The most important thing for me is to get the new VINs completed. I cannot sell these buses until new VINs are approved.” On 7 December 2017, the Department issued two letters amending the import approvals for the buses, being one letter for the second batch and one letter for third batch. According to the Department’s records, the import approval was amended to correct an “error in VINs and year of manufacture". The VIN number of all buses were amended, with “C” replaced with “G”, apart from two buses which, it would appear, had either already been registered in Australia or was the prototype.

81. In addition, for the second batch of buses, the “Year” was amended on the import approval from 2012 to 2016. However, for the third batch of buses, the “Year” was not amended on the import approval and remained as 2012, including for the Bus. As Dongfeng’s request had been the same for both batches of bus, the Department’s failure to correct the “Year” on the import approval for the third batch appears to have been an oversight by the Department. On 19 December 2017, Mr Bamford advised Ms Zhang, “I have a problem with the VINs”. On 3 January 2018, Ms Zhang wrote to the Department noting that various VIN numbers “are still incorrect”. There the matter appears to have rested for some time.

82. In February 2018, the compliance plate was affixed to the Bus. The Bus bears a manufacturer’s plate on the chassis, installed by Dongfeng in 2012, bearing a VIN number with “C”. In addition, a compliance plate is mounted directly below, indicating the approval number issued under section 10A(1) of the Act, the date the compliance plate was affixed to the vehicle (February 2018) and the VIN number as issued by Dongfeng. That is, the amended “G” VIN number approved by the Department is not recorded on the compliance plate nor has the VIN number on the manufacturer’s plate been amended. Mr Booth explained that the VIN number may be changed by stamping through the digit to be changed with an “X” and the new number or character being placed above it or on a new manufacturer’s data plate. It is perhaps not surprising that confusion has ensued.

83. Meanwhile, AHG’s parent company made a strategic decision to wind down its business consisting of importing Chinese manufactured buses. This resulted in most of AHG’s staff being made redundant or transferred to other roles within the parent company, including Mr Bamford, whose last day of employment with AHG was 15 June 2018. As part of his severance package, Mr Bamford was allowed to establish a retail company to purchase some of the imported buses that AHG had purchased to sell in Australia. In February 2018, the first defendant, Adventurer AWD Pty Ltd, was incorporated for this purpose. Mr Bamford is sole director of that company. Between June and October 2018, Adventurer AWD purchased a number of buses from AHG that were manufactured by Dongfeng, including the Bus.

Bus purchase

85. Ms Heath continued to progress the school’s acquisition of a bus, allowing for the Higer bus in the school budget. In February 2018, the acquisition of a new bus was added to the board’s agenda and, in advance of the board meeting, Ms Heath provided the school principal, Mr Bell, with the information she had collated on the bus, including the three quotations obtained from AHG, adding, “I am conscious however that we have not discussed this, and that no-one has given detailed consideration to whether this is an appropriate model (from the view of transportation of our students) which I cannot do. … What do you want to do with this?”

86. On 16 February 2018, the school board met. The board asked Mr Bell to come back to the next meeting with a recommendation of the make and model for a bus, taking into account available models, student numbers and the impact on staff of a larger bus. The input of Andrew Brown, a director of the school and also director of an outdoor education company, would be sought during this process. On 2 March 2018, Ms Heath enquired whether Mr Brown was available to give the principal the benefit of his experience “regarding the purchase of a new bus”.

87. On 17 April 2018, Ms Heath had a telephone conversation with Mr Bamford. Ms Heath asked whether the quotes on the Higer bus were still current and Mr Bamford said, “There is also an AWD option. There is a run out sale and I can give you a good discount for the bus. There is a new model coming out but this is still a current model.” Ms Heath forwarded to Mr Bamford the quotations obtained from Mr Burdock six months’ earlier, adding:

As discussed, can you please confirm or re-issue the quote for a new vehicle. … Can you also provide a quote for a demo model if you have one in stock.

As discussed, please also provide a quote for the 4WD option. If you can provide specifications for this also, it would be appreciated, in particular a summary of the main points of difference, including fuel consumption.

… Can you also provide a timeline from order to delivery?

88. On 19 April 2018, Mr Bamford advised that he had no “demo” Higer in stock. Mr Bamford provided two quotations for a new Higer (cloth or leather seats) together with a quote for a “New Adventurer AWD” and a specification sheet for the Adventurer AWD. The quotations for the Higer bus were $132,703 and $136,245, each allowing for a $3,000 discount. The quotation for the Adventurer AWD bus fell in the middle at $135,483, allowing for a $25,000 discount. Mr Bamford advised Ms Heath that the main difference between the previous and current quotation for a new Higer was that the discount had been reduced as the vehicles were all new builds, not stock, and margins had been squeezed in the intervening period. Delivery for a new Higer would be a minimum of three months from receipt of a deposit. Differences between the Higer and the Adventurer AWD were outlined, “The AWD is in stock in Sydney and is available for delivery within 1 month of a deposit being received … At this early stage of its release the AWD is predominantly being used on mine sites in remote Australia.”

89. On 20 April 2018, Mr Bamford called Ms Heath to follow up on the quotes. Mr Bamford said, “The only bus that I can offer a large discount for now is the Adventurer AWD. The discount on that is $25,000 because it has been in stock for some time.” Ms Heath did not recall the conversation but accepted that this was possible.

90. On 24 April 2018, Ms Heath provided the additional option of an AWD bus to Mr Bell for consideration, noting “one obvious advantage to us is not having to install chains, unless conditions actually require them”. It is apparent that Ms Heath thought that the “Adventurer AWD” bus was a Higer bus and this is hardly surprising where Mr Bamford was still working for AHG at the time and, as I understand it, AHG was selling buses manufactured by Dongfeng as “Higer” buses. The quote for the “Adventurer AWD” bus and its specification sheet, however, were visually markedly different from the quotes for a new “Higer” bus and, presumably for this reason, the defendants are not sued for misleading and deceptive conduct by representing that the Bus was a “Higer” bus.

91. Mr Bell reviewed the various brochures and quotations obtained by Ms Heath, although perhaps not very closely as he also understood that the school was buying a Higer bus and that “Adventurer” was a model of a Higer bus. Mr Bell recalls Ms Heath said she had spoken to the dealer and there were no Higer 2WD buses available in Australia; the dealer had an AWD bus and it could be available in a few weeks; he would give them a good discount on that bus. Mr Bell recalled “reacting strongly” to the extended waiting period for a new Higer. Mr Bell and Ms Heath discussed the difference in price. Mr Bell remembered considering the value of an AWD vehicle in snow conditions. “My understanding [was] that the discount was for the lack of availability for many months of the vehicle that we wanted, and that the dealer had this in stock which I equated to the dealer being, you know, willing to move it on”.

92. On 27 April 2018, the school finance committee considered the “New Bus Purchase”. In addition to the quotation for a new Higer bus, Ms Heath reported that she had also obtained a quotation for a “new All wheel drive [AWD] bus … which would be quite appropriate for school use (allowing NPWS entry without being required to fit snow chains). … [The AWD bus is] available ex stock and should be available before winter.” The finance committee recommended the AWD bus to the board. A board meeting took place later that morning. According to Mr Brown, the board discussed whether the school should get a 2WD or 4WD bus. The price of the bus was also important and the discount was taken into account. The board approved the purchase of the AWD bus.

93. Following the board meeting, Ms Heath forwarded the quotation for the Adventurer AWD to Mr Brown, “to get your feedback on any questions which should be asked … As you can see, the discount on this one was $25,000 so I am not sure if we would get it cheaper through another route, but happy to try!” While Ms Heath said she was not particularly interested in the discount, which she saw as a sales technique, the discount was obviously perceived by Ms Heath at the time to be significant. No attempt was made to further negotiate the price.

94. Mr Brown spoke to a student’s parent, who was in the bus industry and had recently purchased a Higer 2WD bus, to see whether he thought the school should buy a 2WD or 4WD bus. Although Mr Brown had the quotation for the Adventurer AWD to hand, he also understood the school was buying a Higer and the question was simply whether to get a 2WD or 4WD Higer bus. The parent said, “That’s a good price for a 4WD model, it must be based on last year’s model. There’s a new model coming out soon and I’m looking at buying it.” Mr Brown provided the parent’s comments to Ms Heath and Mr Bell. In particular: (emphasis added)

The bus company are solving [problems with the current model] for the newer model but have a number of the older model they are trying to get rid of (I’m guessing the large discount means this bus may be one of them?)

95. Mr Brown was not concerned that the large discount may suggest that the bus was an older model, “what I was trying to convey there was that older model being the current model [versus] a newer model, and my experience is if there's a newer model coming soon, an older model is discounted to move.” Nor was Mr Bell concerned. Ms Heath said Mr Brown’s email would have been cause for concern and she would have investigated those matters. As there was no email documenting her investigations, Ms Heath assumed that she did so verbally by speaking to Mr Bamford, although she could not recollect doing so, there is no evidence that she did so, and I find that she did not do so.

96. The parent suggested that the school drive both buses side by side before making a decision. Ms Heath actioned that suggestion. On 1 May 2018, Ms Heath sent an email to Mr Bamford asking whether the school could test drive the vehicles consecutively, being the Adventurer and Higer. A time was arranged. A school teacher, Kelli-Rae Wilson did the honours. Ms Heath told Ms Wilson that the feedback from one of the parents was that the AWD model was “not very gutsy” and she was asked to drive it and see how it responded when driven. Ms Wilson was offered a test drive of both the Adventurer and Higer but said she had already driven a 2WD and just wanted to drive the AWD. Ms Wilson provided her feedback to a meeting of the executive of the school board a few days later.

97. On 14 May 2018, Mr Bamford sent Ms Heath a revised quotation for the Adventurer AWD together with a contract. The “Contract to Purchase a New Vehicle and Tax Invoice” was issued by Adventurer AWD. The contract noted that the VIN, engine number and registration number were ‘to be advised’. The Compliance Year was stated to be 2018. The Build Year was left blank. Mr Bamford said that AHG still owned a group of buses and, at the time of drafting the contract, he did not know which of the buses would be the subject of the sale. I accept this. Mr Bamford denied that he left the Build Year out on purpose and said it was an oversight. I do not accept this: see [145].

98. Mr Bell and Ms Heath signed the contract on 17 May 2018. A 10% deposit of $15,068 was paid. The school was obtaining finance for the purchase. Ms Heath was soon to leave the school and asked the bank officer to liaise with her colleague, Christine Dicker, on finance for the new vehicle. On 2 June 2018, the bank officer asked the school to have further details added to the invoice, including the VIN and engine number. Ms Heath requested an updated invoice from Mr Bamford. Mr Bamford gathered “all the information you requested” and forwarded an amended contract which included the VIN and engine number. The Build Year remained blank. Whilst the school had not specifically requested that the Build Year be added to the contract, the request to provide additional details gave Mr Bamford a second opportunity to include this information. Failure to add to the Build Year on this occasion tends to suggest it was no oversight. Ms Dicker forwarded the amended contract to the bank.

99. On 7 June 2018, the school entered into a loan agreement with its bank. The school borrowed $135,613 to be repaid by 60 monthly instalments of $2,551.55, with the last payment to be made in May 2023. The school also paid an establishment fee for the loan of $450. Ms Heath arranged insurance for the new vehicle to be added to the school’s insurance policy. The cost of the comprehensive insurance was $1,053.02. The school was then ready to complete the purchase, on registration of the vehicle.

100. On 26 June 2018, the bank paid the balance of the purchase price. Mr Bamford drove the Bus from Sydney to Canberra. He also arranged for the Bus to be registered. Mr Bamford provided details about the vehicle for the purposes of compulsory third party insurance, informing the insurer as to the Compliance Year, “2018 (build 2016)”. On 27 June 2018, Mr Bamford forwarded the CTP insurance policy to Ms Dicker. The model of the vehicle was recorded on the CTP policy as “2016”. Had Ms Dicker reviewed the CTP policy, she may have noticed this detail. There is no evidence that she did. In any event, by then, the purchase had been completed and the Bus was on its way. CTP insurance cost $1,399, although the school did not reimburse Adventurer AWD for this expense. On 27 June 2018, the vehicle was registered. The certificate of registration recorded the year of the vehicle as 2018. Registration cost $5,374, although the school did not reimburse Adventurer AWD for this expense either.

101. Mr Bamford did not encounter any material issues with the Bus prior to delivery. The Bus had not been registered to any previous owner nor incurred any significant kilometres. On 27 June 2018, Mr Bamford sent an email to Ms Dicker advising “the fuel gauge was not reading consistently”. Mr Bamford was going to see a company that morning to see what they could do. Mr Bamford drove the Bus onto Jindabyne, where he stayed overnight at the school’s expense. Ms Dicker said the hotel cost $130.

102. The school took delivery of the Bus on 28 June 2018, when Mr Bamford advised that he had noticed that the fuel gauge was not working properly and would arrange the parts and get them delivered to the school to be fixed locally. “Just pay for the repairs and take if off the registration costs.” Mr Bamford met the school’s general maintenance supervisor, Clint Adams, and said, “This is the new bus that the school has purchased.” He went for a drive of the Bus with Mr Adams, who did not voice any concerns regarding its performance. After the drive, Mr Adams completed an inspection of the Bus and Mr Bamford gave him some instructions on the various switches. Soon after delivery, Ms Dicker went inside the Bus for the first time. It did not have a ‘new car’ smell. The inner walls had scuff marks. The vinyl on the dash had started lifting. Ms Dicker commented to Mr Adams that the Bus was supposed to be brand new but did not look like it. Ms Dicker and Mr Adams thought that the Bus was supposed to be a Higer bus.

103. The school obtained NRMA membership for the Bus at a cost of $486.25. In mid-July 2018, Mr Bamford says he received a telephone call from Ms Dicker, who said the board wanted to swap the AWD bus with a 2WD bus as the teachers needed to obtain a Medium Rigid (MR) licence to drive the AWD bus; it was thought to be too expensive to get every teacher upgraded to this licence. Mr Bamford offered to pay half of the costs to upgrade a couple of drivers to the MR licence. Ms Dicker said it was thought dangerous for teachers to drive such a large and heavy vehicle, and the school did not appreciate that the teachers would have to complete a log book for each trip. The fact that a fuel additive needed to be used was also thought to be inconvenient. Ms Dicker later called Mr Bamford again, saying the board had accepted his comments about the log book and fuel additive and wished to ask if Mr Bamford would cover half of the licence fees for up to seven drivers. Mr Bamford agreed.

104. In late August 2018, Ms Dicker arranged with Mr Bamford to return the Bus for repairs and to fix some problems. Ms Dicker sent a list of problems to Mr Bamford. The school paid the wages for the staff member who drove the Bus back to Sydney, being some $450. On 7 September 2018, Mr Bamford sent Ms Dicker a detailed email, responding to each of the problems with the Bus which she had raised and how it had been addressed. Mr Bamford also attached an invoice for the work undertaken, totalling $7,300, but waived all charges. As the invoice outlined, in addition to replacing various components and detailing the bus, Adventurer AWD offered to contribute $2,400 to MR licence upgrades. The school’s experts point to the fact that the defendants’ replaced these components as consistent with the Bus having been constructed years earlier, as the components would not otherwise have needed to be replaced.

A competitor calls

105. As mentioned, Mr Burdock’s employment with AHG ceased in unpleasant circumstances earlier described: see [35]. Mr Burdock went to work for a competitor, which had taken over the Higer franchise. In August 2018, Mr Burdock found Ms Dicker’s contact details online and called Ms Dicker at the school. According to Mr Burdock, he told Ms Dicker that he understood the school had recently purchased an Adventurer AWD branded bus. “I have heard of instances where these buses were sold as new when they are not. Are you aware that the bus you purchased was built in 2012?” Mr Burdock had not joined AHG until 2015 so was in no position to say when the Bus was built and appeared to have drawn this conclusion from the VIN number, notwithstanding that he was copied on later emails with Dongfeng regarding changing the VIN number given that manufacture was not completed until 2016 or 2017.

106. According to Ms Dicker, Mr Burdock said he understood that the school had some issues with the bus recently purchased from Mr Bamford. Ms Dicker agreed. Mr Burdock said, “This bus has been sitting in China since 2012. [Mr Bamford] is not part of Higer. He went out on his own to sell the AWD buses. These buses aren’t part of Higer or AHG … he has a workshop next to Higer but he has nothing to do with Higer. He left Higer to start his own business. All he is doing is selling these buses and he’ll then close the company down and you’ll have no warranty support. Neil was previously the general manager of AHG … he purchased the AWD buses to keep selling them, but he doesn’t sell the 2WD buses.”

107. On 4 September 2018, Ms Dicker reported to the principal on what she had learned from Mr Burdock, “I believe the Bus we just purchased to actually be 6 years old, as I have been advised it was built back in 2012, sitting in China unused since that time.” Ms Dicker also listed “other issues I have been made aware of”, presumably, by Mr Burdock:

●   The contract does not specify “built date”. Apparently these vehicles have been sitting in china unused since 2012. The compliance plate will be 2018, as this vehicle has only just been registered in Australia. If the Built date can be proved to be 2012 – the vehicle is “not fit for purpose”, and would suggest to seek to return the bus and refund.

●   This bus is not a “Higer”. This bus is a Cumm[i]ns, with the same motor as Higer.

129. The defendants submitted that the school could not be said to have had a reasonable expectation that the defendants would disclose that the Bus was built/manufactured in 2016. Mr Bamford made it clear to Ms Heath that the discount of $25,000 was offered because the Bus had been in stock “for some time”. In Ms Heath’s email to Mr Brown, she noted, “As you can see, the discount on this one was $25,000 so I am not sure if we would get it cheaper through another route, but happy to try!” The discount and price was a significant factor in determining whether to proceed to purchase the Bus. Mr Bell said he reacted “strongly” to the length of time it would take to wait for a new Higer. Relevant to the school’s decision was that the Bus was available to be delivered. The Court should find that the school would have proceeded with the purchase even if they had known the Bus completed manufacture in 2016 as the most important factors for the school were price and availability.

Conclusion

134. Adventurer AWD was not incorporated until after manufacture of the Bus was complete.  Nevertheless, Mr Bamford’s knowledge of the features of the Bus is imputed to the company: Commonwealth of Australia v Davis Samuel Pty Ltd (No 7) [2013] ACTSC 146; (2013) 95 ACSR 258 at [695]. Similarly, as Mr Bamford was the sole director and shareholder of the company, there is no doubt that, if the company contravened the Australian Consumer Law, then Mr Bamford was “involved” in the contravention as he had actual knowledge of the essential matters or facts that made up the contravention and intentionally participated in the contravention.

135. Whilst Mr Burdock told the school that the Bus was built in 2012, the fact is that the Bus began to be built in 2012, when the VIN was attached to the chassis, but was not completed until 2016 (or, indeed, 2017 if regard is had to Mr Hunter’s email at [69]) after substantial modifications were made. I am comforted in this conclusion by the fact that the Department, who no doubt had access to more voluminous material than this Court, reached that conclusion on the basis of information provided by Dongfeng. As Mr Booth said, and as seems inherently likely, the Department would not approve such a change unless the documentation was “very robust”. Thus, the model year was 2012, the build year was 2016 and the compliance date was February 2018. The model when sold was the current model, albeit there had only ever been one model.

136. That said, the evidence of Mr Dall’asen and Mr Biega suggests that a substantial part of the Bus had been constructed some years earlier. True it is that, when Mr Booth attended the factory in May 2015, the partially assembled chassis were inside the factory and under covers. But Mr Booth was obviously not at the factory all of the time. It is apparent from Mr Biega’s observation of the exterior roof hatch that the Bus had, at some time, been left outside for long enough for the roof hatch to discolour and show signs of weather damage. Mr Dall’asen’s observation of the tag on the seatbelt as faded and discoloured is consistent with the Bus being parked outside for lengthy periods. Other observations made by Mr Dall’asen (noted at [121]) lead to a similar conclusion.

137. Some of the dust and oil observed may be referable to the school’s use of the Bus for two months and subsequent storage in Sydney. As to the school’s use of the Bus, there is no evidence of the number of kilometres which the Bus had travelled before and during delivery to the school. The Bus had travelled 1,387 kms when inspected by Mr Biega, which including the mileage when the school drove the Bus back to Sydney for repairs. So the school’s use of the Bus appears to have been minimal. The Bus had been sitting at the school for almost two years when Mr Biega and Mr Dall’asen examined it. Some of the leakage of fluids may be referable to the Bus having been loaded with the necessary fluids on sale but sitting unused some time since then.

138. As to the school’s storage of the Bus, while Mr Bell said the Bus was “at Sydney”, there is no evidence as to whether the Bus was stored indoors or outdoors. When Mr Biega and Mr Dall’asen examined the Bus, it was in a warehouse. But that does not tell me whether the Bus was stored in a warehouse in the intervening two years. Some of the sun damage may be referable to the Bus sitting outside during part or all of this time; I do not know one way or the other whether the Bus sat outside during this period.

139. Overall, and doing the best I can, it seems more likely that the bulk of the deterioration documented by the school’s experts was referable to the lengthy production history and storage of the Bus rather than its recent use and subsequent storage by the school. Thus, whilst the Bus was “new” according to the Motor Vehicle Standards Act, it was not “new” for the purposes of the Australian Consumer Law where the vehicle had suffered significant deterioration, was not of recent origin and – to the extent that the vehicle was damaged by prolonged storage outside – the vehicle had not been repaired such that it was “as good as new”. Nor, as I understand the evidence of the school’s experts, can that readily be done.

140. Whilst the Court had the benefit of extensive examination of the Bus by the experts, the relevant time for testing whether conduct was misleading or deceptive is the date of the making of the representation and not with the benefit of hindsight: Agnish Pty Ltd v Folio Invest Pty Ltd (No 4) [2020] FCA 120 at [99]. This case is perhaps unusual as the vehicle salesperson, Mr Bamford, had also been involved in the manufacture and importation of the Bus to Australia. Thus, Mr Bamford knew a great deal about the history of the buses since White Motor Corporation took over the importation of these buses from Brahman in September 2014. He did not, however, have any personal involvement in the initial stages of design and manufacture of the Bus in 2012 or 2013. Nor did he know the precise features of this Bus, as documented by the school’s experts after spending hours examining the vehicle.

141. Mr Bamford said that, during negotiations, he was not aware of the manufacture date of any specific component of the Bus including the engine. I accept this. Mr Bamford understood that the Bus had completed manufacture in 2016 after the modifications and upgrades already described. He was aware that its compliance date was 2018. Mr Bamford also knew that, in September 2014, the buses were “inventory vehicles” which, with the assistance of Mr Booth in 2015 and 2016, were substantially modified before being approved for import into Australia. He knew that, in March 2016, Dongfeng gave AHG a further “warehouse age discount” for the buses. While the Bus completed manufacture in 2016, Mr Bamford likely appreciated that a substantial part of the vehicle had been made some years earlier.

142. There is nothing to suggest that Mr Bamford knew how the buses had been stored in the intervening period, nor that the Bus had been exposed to the sun or weather. Thus, of the features of the Bus which were inconsistent with it being described as “new”, there is no evidence that Mr Bamford knew that the Bus had suffered significant deterioration, nor that any deterioration could not be effectively repaired such that the Bus was “as good as new”. But he did know that the Bus was not of recent origin. Representing that the bus was “new” was apt to mislead in the absence of further clarification. This could have been done by two means, firstly, providing the school with the Build Year or, secondly, providing the school with additional information on the history of the Bus. The defendants did neither. The question is whether the defendants engaged in misleading and deceptive conduct by silence by failing to inform the school of either matter. That turns upon whether, in the whole of the circumstances, a reasonable expectation existed that disclosure should be made or silence broken.

143. Mr Biega said that, if he was selling a vehicle in 2018 that was “completely brand new” but built in 2016, he would disclose to the purchaser that the vehicle had been built two years prior and would also reduce the purchase price as an incentive given that the vehicle was not recently built. Likewise, Mr Dall’asen considered that the fact that the bus had been built many years prior to its sale date was something which a licensed motor dealer should have disclosed to the school prior to the sale of the bus.

144. Here, Mr Bamford appreciated that the school was interested in buying a “new” or “demo” bus. The Bus was represented to be “new”. The Bus was sold in 2018 and the only information as to the vintage of the Bus – in the contract or otherwise – was the Compliance Year of 2018 noted on the contract. I consider that a reasonable expectation existed that a further disclosure be made to clarify the position. I do not consider that the school would have expected a motor vehicle dealer to disclose the manufacturing history of the Bus in full, if for no other reason than it would not expect the salesperson to have such knowledge. But the school was entitled to expect that the salesperson would disclose the Build Year if it differed markedly from the Compliance Year.

145. I do not think Mr Bamford left the Build Year uncompleted on the Contract as an oversight. Rather, Mr Bamford was aware of, and sensitive to, the complicated production history of the Bus and was careful not to disclose information which may detract from a sale of the vehicle. In the circumstances of this case, this was misleading and deceptive conduct by silence.

146. As Mr Dall’asen observed, for buses and trucks, the build date can vary from manufacturer affixed compliance plates by one or more years. That is, the difference between the Build Year (as approved by the Department) and the compliance plate was not unusual for commercial buses. As mentioned, Mr Biega said that, when selling such a bus, he would disclose that the vehicle had been built two years prior and reduce the purchase price as an incentive to buy it. Here, the defendants did not make the disclosure but did offer a substantial discount.

147. Turning to causation, “there must be a sufficient causal link between the conduct and error on the part of persons exposed to it. It is in that sense that it can be said that the prohibitions in [section 18] were not enacted for the benefit of people who failed to take reasonable care of their own interests”: TPG Internet at [39] per French CJ, Crennan, Bell and Keane JJ. For example, in Hyder v McGrath Sales Pty Ltd [2017] NSWSC 1647, a real estate agent represented that a property had “private parking” on a right of way. Whilst Parker J was satisfied that the purchaser saw the “private parking” as a positive selling point, had the purchasers correctly appreciated the position, they would still have gone ahead because of other features of the property which they found attractive: at [101].

148. Would disclosing the Build Year, either before or in the contract, have made a difference? The school board decided to purchase the Bus without having seen it or test driven it. No doubt this was in part due to the distance of the school from Sydney. Ms Wilson test drove it after the board had made its decision. The board, essentially, made its decision on the basis of the quotations and specifications received, which contained no information as to the Build Year or Compliance Year, or indeed any year at all. According to the contemporaneous records, factors in the board’s decision were:

1. when the Bus could be delivered, as the school was keen to have the Bus before winter;

2. the suitability of the Bus for snow conditions, where the fact that the Bus was AWD was perceived to have advantages, including reducing the need to put chains on the vehicle;

3. the ease with which the teachers could drive the Bus, including without the need to upgrade their driver’s licence; and

4. price, including the substantial discount offered, such that the school was effectively acquiring an AWD vehicle for the price of a 2WD vehicle.

149. Ms Heath understood “new” to mean that the bus had been built in China and shipped to Australia for sale without a significant delay in that chain of events. Whilst Ms Heath normally assumed that a “new” vehicle was built in the year in which the vehicle was purchased, as the Bus was being bought in the first quarter of 2018, she would have considered a bus from 2017 to be a new vehicle but not a bus built in 2016. Ms Heath said had it been disclosed that the Bus had “completed manufacture” in 2016, she would not have proceeded with further negotiations for the purchase of the Bus, nor presented it as an option to the board for consideration as, in her view, such a bus was not a brand new vehicle. Mr Bell said that, had he been aware that the Bus completed manufacture in 2016, he would not have signed the contract. He was proceeding on the basis that the school was being offered a new bus for purchase. Mr Bell understood a new bus to be “recently manufactured and not used by anyone else.”

150. It is difficult to assess the veracity of this evidence given the problem mentioned at the outset. The school’s witnesses appeared generally incensed by what Mr Burdock had told them, including that the Bus was made in 2012 and had been sitting outdoors ever since. Both Mr Bell and Ms Heath’s evidence was in more strident terms than may have been the case if they had known all the details. Both were generally derisory of the suggestion that the Bus “completed manufacture” several years after 2012, albeit that it obviously did. Assessing what the school would actually have done had it known the Build Year was 2016 requires some of this intensity to be removed. Mr Bell and Ms Heath did not suggest in their affidavits that they read, or relied upon, the details given about the Bus in the contract, in particular, the Compliance Year of 2018, nor noticed that the Build Year was left blank. However, in re-examination, Mr Bell said, “certainly upon receiving and signing the contract, the 2018 date there affirmed the belief that we were buying a 2018 vehicle …”.

151. There is no doubt that the school appreciated that the Bus was old stock and the dealer was offering a large discount for that reason. According to Ms Heath, Mr Bamford told her at the outset, “There is a run out sale and I can give you a good discount…” This was apparent from Mr Bamford’s remarks, the substantial discount offered and the parent’s comment passed on by Mr Brown, “The bus company … have a number of the older model they are trying to get rid of (I’m guessing the large discount means this bus may be one of them?)” Members of the board, in particular, Mr Bell, understood that the discount was likely because the bus was old stock which the dealer was trying to “move it on”. He was unconcerned, in circumstances where the parent was suggesting that the Bus was not the current model. Whilst Ms Heath said she was concerned, she did not action this concern but only the suggestion that the school drive both the 2WD and AWD to decide which one to pick.

152. The school was open to considering a bus that was less than “brand new from the factory”, having considered quotations for a “demo” and “used” bus as well as choosing to buy a bus which it knew was old stock. The question for the school was which was the best bus to buy having regard to a number of factors set out at [148]. The board made its decision before receiving the contract and without any information as to the Build Year or Compliance Year of the Bus, albeit on the basis that the Bus was “new”. On becoming aware from the parent’s feedback that the Bus may not be the current model, the school made no enquiry to clarify the position. This suggests that, of the factors considered by the school, whether the bus was the current model was not decisive having regard to the other factors such as when the Bus could be delivered, its suitability in snow condition and the fact that the school was acquiring an AWD vehicle for the price of a 2WD vehicle. I conclude that, even if Mr Bamford had told Ms Heath the Build Year of the Bus, to which he would likely have had to add an explanation as to what that term meant, on the balance of probabilities the school would still have gone ahead and purchased the bus because of other factors in the decision-making process which made it attractive.

153. The school’s dissatisfaction with the Bus is referable to three matters: Mr Burdock’s advice, which was not accurate; confusion arising from the Department’s approval of a change in VIN number and imperfections in that process; and discomfort experienced by the school’s teachers in adjusting to a larger and different type of bus to the one which they were used to driving.

154. If I am wrong about this, the school would be entitled to receive an amount to reflect its actual loss or damage. Although commonly the tortious measure of damages is applied, being the amount required to place the plaintiff in the position it would have been had the conduct complained of not occurred, section 18 of the Australian Consumer Law does not, in terms, require this approach. The Court is not bound to approach the matter by analogy, either with the law of contract or tort: Salvatore Coco v Westpac Banking Corporation [2012] NSWSC 565 at [89] per Hammerschlag J.

155. As to when damages are to be assessed, the High Court held in HTW Valuers (Central QLD) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640; [2004] HCA 54 that damages for a misleading statement are to be assessed at the date some or loss or damage has been suffered, but the Court may take into account “all matters known by the later date when the Court’s assessment is being carried out”: at [39]. Damages may be assessed at the time of the trial, provided it works no injustice: at [64]-[65].

156. The funds which the school outlaid are easy to tally, being the deposit ($15,068), the school’s indebtedness to the bank ($135,613), the establishment fee ($450), insurance ($1,053.02), Mr Bamford’s hotel accommodation ($130), NRMA membership ($486.25) and the wages of the staff member who drove the bus back to Sydney ($450). By my calculations, this totals $153,250.27. Nor would the school be obliged to reimburse the defendants for the registration and CTP insurance.

157. There is no evidence as to what the Bus was, in fact, worth at the time of purchase. It may have been, for example, that the price at which the Bus was sold was at such a discount that the school acquired the Bus for less than it was worth, and suffered no damage at the time of purchase.

158. There is also limited evidence as to what the Bus is worth today. In June 2021, the defendants were advertising another of these buses for sale for $110,000 excluding government charges, where the bus was described as “new” and had 200 kilometres on the odometer. Presumably, the Bus is worth less than this as it has travelled more kilometres but, more importantly, has already been the subject of a sale to the school and thus any on-sale would be as a “second-hand” vehicle. Doing the best I can, the Bus would be worth $80,000 today. The difference is $73,250.

ORDERS

159. Whilst the school has not established its claim, the defendants did contravene the Australian Consumer Law. It may be in those circumstances that an appropriate costs order is that each party bear their own costs of the proceedings. As I noted at the commencement of the hearing, the small quantum of the school’s claim may also make it appropriate for the Court to cap the parties’ costs. However, it is appropriate that I give the parties an opportunity to either agree upon an order as to costs, or failing agreement, make brief submissions addressing these considerations.

160. For these reasons, I make the following orders:

1. Judgment in favour of the defendants.

1. As to costs:

1. direct the defendants to serve any submissions (limited to three pages) and affidavits in respect of costs by 15 January 2022;

2. direct the plaintiff to serve any submissions (limited to three pages) and affidavits in reply by 31 January 2022;

3. any order as to costs is to be determined on the papers.

3. In the event that the parties do not file any submissions under Order 2, order that there be no order as to the costs of the proceedings with the intent that each party bear their own costs.

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Decision last updated: 17 December 2021