State of SA v Vehicle Auctions Pty Ltd & Tarabay No. Scciv-02-1540

STATE OF SOUTH AUSTRALIA v VEHICLE AUCTIONS PTY LTD & TARABY
[2003] SASC 146
Magistrates Appeal
Gray J

This is an appeal from the decision of a magistrate following a civil trial.
Vehicle Auctions Pty Ltd claimed damages against Antoun Taraby for breach of warranty of title and against the State of South Australia for a breach of a duty of care. The magistrate entered judgment against both defendants but made no order for contribution. The State seeks to have the judgment against it set aside. Mr Tarabay has not appealed from the judgment against him. However, he has cross appealed seeking an order for contribution against the State.
Background
On 13 November 1998 Sanaa Zeidan, a resident of New South Wales, purchased a Toyota motor vehicle from a dealer. Ms Zeidan registered the vehicle. The registration number was 8DW98C. The vehicle carried chassis number JT772SC1100092137 and engine number 3S2049463. On 19 November 1998 the vehicle was stolen. Ms Zeidan reported the theft to the police.
On 3 December 1999 application for South Australian registration was made to the Motor Vehicles Department under the name Michael Powers of 16 Thomas Street Salisbury. The application related to a Toyota motor vehicle that was said to have been previously registered in New South Wales. The application indicated that Mr Powers had acquired the vehicle on 15 November 1999. The value was declared to be $16,500. The application appeared to be signed M Powers.
The application for registration was accepted on 3 December 1999. The registration certificate was issued to Mr Powers. The registration certificate identified the vehicle as a white Toyota station wagon VIN chassis number JT772SC1100151125 and engine number 3S204946. The year of manufacture was shown as 1997 and the registration number as AA512X.
On 8, 9, 10 and 11 December 1999 Mr Tarabay placed the following advertisement was placed in the Advertiser:
RAV4 1997, all time 4 x 4, fully optioned, auto, extra features, ex cond $20,000 aa-512x. Ph. 8356 7822: 0415 668 621.
On 28 December 1999 Mr Tarabay made application to transfer the registration obtained on 3 December 1999 from ostensibly Michael Powers. Mr Tarabay was in possession of the registration certificate. The transferor was disclosed as M Powers. The transfer application contained a signature “M Powers” as transferor. Mr Tarabay signed as transferee. The transfer application disclosed the date of purchase as 28 December 1999 and a consideration of $10,000.
The Department processed the transfer application and issued a new certificate. This registration certificate identified the owner as Antoun Tarabay. The vehicle continued to carry the registration number AA512X. The registration certificate identified the vehicle as a white Toyota station wagon VIN chassis number JT772SC1100151125 and engine number 3S204946.
On 4 January 2000 Mr Tarabay consigned the vehicle for sale with Vehicle Auctions. He sought a net price of $18,500. He produced the certificate of registration. He signed a consignment declaration in which he guaranteed title. He asserted that the vehicle was unencumbered. He signed a vehicle condition declaration. The vehicle sold at auction on 5 January 2000 for $18,200. The amount of $17,200 was remitted to Mr Tarabay.
In November 2000 police enquiry revealed that the vehicle consigned for sale with Vehicle Auctions by Mr Tarabay was the same vehicle that had been stolen from Ms Zeidan.
The Proceedings
Vehicle Auctions reimbursed the purchase monies to the purchaser at auction and then brought these proceedings against Mr Tarabay and the State. As earlier observed the claim against Mr Tarabay was upheld and the judgment in that respect has not been challenged on appeal. The claim against the State alleged a common law duty of care owed by the State to Vehicle Auctions. No claim was pleaded or pursued for breach of statutory duty.
The Magistrates Court rules permitted the court to order contribution between defendants without the need for contribution notices. The magistrate did not deal with this issue. Mr Tarabay, by way of cross appeal, sought contribution from the State. He claimed that the State owed him a common law duty of care.
The approach of the Magistrate
Counsel agreed that the magistrate’s approach was flawed. It was accepted that the magistrate did not consider whether a common law duty of care arose on the part of the State to Vehicle Auctions or Mr Tarabay. The reasons for judgment disclose that the magistrate proceeded on the basis that Vehicle Auctions alleged a breach of statutory duty. Such a claim was not pleaded or advanced by Vehicle Auctions and was eschewed on appeal.
It was also accepted that the magistrate did not address the issue of contribution. In these circumstances the judgment entered in favour of Vehicle Auctions against the State must be set aside.
Counsel agreed that this court should finally determine the proceedings. Although the magistrate did not make all necessary findings concerning credibility and reliability, all parties requested that this court reach a final conclusion doing the best it could with the transcript and exhibits.
The Facts
Acquisition by Mr Tarabay
The circumstances under which Mr Tarabay acquired the vehicle are unclear. He claimed to have purchased the vehicle two and a half months before applying to transfer registration on 28 December 1999. If this was correct he must have acquired the vehicle during October 1999. Later Mr Tarabay claimed that the acquisition was made on 15 November 1999. Later still he said he acquired the vehicle about ten days before he applied to transfer registration. Advertisements placed by Mr Tarabay in the Advertiser newspaper from 8 December 1999 suggest that the vehicle was in Mr Tarabay’s possession at some time prior to that date.
There were other difficulties with Mr Tarabay’s evidence. It was said that Mr Tarabay’s brother paid cash for the vehicle. In his application to transfer registration, he deliberately misstated the purchase price. He claimed to have paid $15,000 for the vehicle, but on the application to transfer he disclosed a purchase price of only $10,000. No receipt was obtained. Mr Tarabay also misstated the date of purchase asserting that he had purchased the Toyota on 28 December 1999. If he did in fact purchase the Toyota, the transaction would appear to have occurred at a much earlier date.
Counsel for Mr Tarabay conceded that his client had defrauded the State. Counsel accepted that the misstatement of the purchase price led to an evasion of stamp duty. Mr Tarabay’s suggestion that he had acquired the vehicle on 28 December 1999 avoided further financial penalties.
Enquiries by the State of South Australia
The vehicle was presented at the Department of Road Transport Regency Park facility on 3 December 1999 pursuant to the statutory requirement that interstate vehicles to be registered in South Australia be subject to inspection. The purpose of the legislative scheme is discussed later.
The vehicle was inspected on 3 December 1999 by Peter Brunoli, a departmental officer. He inspected approximately 30 vehicles on any one day with each inspection taking about 5 minutes. Mr Brunoli said that the normal practice was for an inspector to collect the papers for a vehicle, to undertake a checking process and then to complete the paperwork.
Mr Brunoli inspected the vehicle on 3 December 1999. He recognised his handwriting and inspector number on departmental records relating to the vehicle. These records disclose that Mr Brunoli checked the manufacturer’s plate. He noted on the records that the manufacturer’s plate displayed a different date to that which had appeared on another form. At the time of Mr Brunoli’s inspection, the computer on which a stolen vehicle check would normally have been undertaken was not operating. However, another departmental officer later conducted a database check. The other officer ticked the box in accordance with the usual departmental procedure. This conclusion could be drawn as a tick appeared on the record marking the computer database check as having been completed. Mr Brunoli said that he had not ticked that box. The vehicle passed inspection and was registered.
Christopher John Hackett, a police officer in the physical evidence section, gave evidence regarding other aspects of the inspection. It was his evidence that the fake compliance plate on the vehicle looked like a normal plate. In his opinion, it would be almost impossible to determine that it had been altered by a visual inspection. He further gave evidence that had the numbers as visible from the inspection been entered into the computer, no match for a stolen vehicle would have been returned.
Vehicle Auctions
Vehicle Auctions was established in 1977. Its business was the auctioning of motor vehicles. As earlier observed after transferring the registration Mr Tarabay consigned the vehicle for sale with Vehicle Auctions.
Vehicle Auctions developed policies and practices which were utilised throughout its business. Standard procedures were to be followed by employees when accepting vehicles on consignment for auction.
One policy was to ensure, as far as possible, that those purporting to own vehicles did in fact possess good title. The procedures developed to give effect to this policy required a seller to produce receipts of purchase, registration certificate and a drivers licence. The seller was also required to answer a number of standard questions relating to the vehicle. The purpose of these procedures was to confirm “clear” title. This was recognition that certificates of registration were not evidence of title.
Vehicle Auctions developed a standard procedure by which the title of every vehicle accepted for sale was independently checked. The purpose of the procedures was to ensure that a vehicle was neither stolen nor encumbered. A report was sought from a third party, Vehicles Securities Register. Details of the vehicle were provided to Vehicles Securities Register. Vehicle Auctions could request an oral or written report or both.
It was the evidence of officers of Vehicle Auctions that the standard procedures were followed in the present case. A Vehicles Securities Register check was requested. A document amongst company records confirmed that the check had returned the answer “clear”. It was on the basis of this check that the vehicle in the present case was accepted on consignment for sale at auction.
The evidence established that from time to time, Vehicle Auctions would enter into contractual arrangements with the Department for an officer to attend at Vehicle Auctions premises and give advice concerning vehicle ownership. A fee would be charged for this service. This course was followed with interstate vehicles. This practice evidences the creation of a special relationship between the Department and Vehicle Auctions. In these circumstances conditions of reliance and dependance might arise. A duty of care may arise from this special relationship.
Section 140 of the Motor Vehicles Act 1959
Counsel for Vehicle Auctions conceded that his client was either on notice or was to be taken to be on notice of the provisions of the Motor Vehicles Act 1959. Section 140 provides:
Evidence of registers
140. (1) A document purporting to be an extract from, or copy of, an entry contained in any register kept pursuant to this Act and purporting to be certified as such an extract or copy by the Registrar is, in all legal proceedings and arbitrations, admissible as evidence, and is, in the absence of proof to the contrary, proof of the matters stated without the production of any register, licence, notice or other document upon which any entry may be founded.
(2) With respect to the ownership of a motor vehicle, subsection (1) operates to facilitate proof of the person recorded on the register of motor vehicles as the owner of the vehicle but neither the register nor an extract from, or copy of, an entry contained in the register constitutes evidence of actual title to the vehicle.
Common Law Duty of Care
The Legal Approach
Although the High Court has moved away from the doctrine of proximity, no unified approach has been established to take its place. As McHugh J said in Perre v Apand Pty Ltd[1]
Indeed, since the fall of proximity, the Court has not made any authoritative statement as to what is to be the correct approach for determining the duty of care question…At all events, the differing views of the members of this Court in the present case suggest that the search for a unifying element may be a long one.
Gaudron J also commented:[2]
It may well be that, at this stage, the notion of proximity can serve no purpose beyond signifying that it is necessary to identify a factor or factors of special significance in addition to the foreseeability of harm before the law will impose liability for the negligent infliction of economic loss.
[1] (1999) 198 CLR 180 at [76] see also Graham Barclay Oysters Pty Ltd v Ryan [2002] HCA 54 per Kirby J at [229]-[244].
[2] Perre v Apand at [27]
Gleeson CJ and Gummow J considered that no general formula could be devised, and adopted the approach of isolating a number of salient features which combined to constitute a sufficiently close relationship to give rise to a duty of care. McHugh and Hayne JJ favoured an incremental approach. Callinan J considered a number of factors and found that their combination gave rise to a duty of care. He suggested that the Court should move incrementally. Gaudron J considered whether a legally protected right of the plaintiff had been infringed. Kirby J favoured the three stage Caparo test.
The factors identified by each member of the Court are not dissimilar. All judges recognised public policy factors as capable of excluding or negativing a duty of care.
The High Court considered the essential criterion for establishing a duty of care in Crimmins v Stevedoring Industry Finance Committee[3] but still no unified approach has been established. The decision in Crimmins is of importance in the present case as the Court addressed the issue of a duty owing by a statutory authority and whether the statutory scheme implied an intention to exclude a common law duty.
[3] (1999) 200 CLR 1
The approach taken by the High Court in Crimmins was to determine whether a statute indicates an intention to exclude a common law duty of care[4]. The terms of the statute may expressly or by implication be inconsistent with a common law duty, thereby negating such a duty.
[4] See judgment of Gleeson CJ at [3], Gaudron J at [27], Kirby J at [203]
Gaudron J considered that one looked to see if the circumstances gave rise to a duty of care at common law, and then enquired whether the statute should be understood to modify it. Gummow J took the opposite view. His starting point was to consider the terms of the legislative scheme. If the statute is incompatible with any possible duty no further enquiry is called for. Kirby and Hayne JJ appear to have adopted the same approach. McHugh J with whom Gleeson CJ agreed adopted the incremental approach. Callinan J commenced his enquiry with the common law and then considered whether the legislative provisions would operate to modify, mould or indicate the common law principles.
Despite the differences to the general approach taken, all members of the High Court treated as critical the question whether the statute negatived a duty of care.
In Graham Barclay Oysters Pty Ltd v Ryan[5], the High Court again addressed the question of duty owing by a state authority. Gleeson CJ described the general approach in the following terms:
Here we are concerned with the problem of deciding, in a case where the government had certain powers, whether it is accountable, through the law of negligence, for not exercising its powers, or for not exercising them sufficiently. To apply that form of legal accountability requires the identification, not merely of a power, but also a duty; a duty of care owed to a citizen or a class of citizens. A conclusion that such a duty of care exists necessarily implies that the reasonableness or unreasonableness of the inaction of which complaint is made is a legitimate subject for curial decision. Such legitimacy involves questions of practicality and of appropriateness. There will be no duty of care to which a government is subject if, in a given case, there is no criterion by reference to which a court can determine the reasonableness of its conduct. That negative proposition leaves open other questions as to the circumstances in which the law will treat failure on the part of a public authority to exercise a power as a breach of a private law duty of care; but it is sufficient to resolve a substantial part of the case against the State in these proceedings.
Gummow and Hayne JJ observed[6]:
The existence or otherwise of a common law duty of care allegedly owed by a statutory authority turns on a close examination of the terms, scope and purpose of the relevant statutory regime. The question is whether that regime erects or facilitates a relationship between the authority and a class of persons that, in all the circumstances, displays sufficient characteristics answering the criteria for intervention by the tort of negligence.
[5] [2002] HCA 54 at [15]
[6] [2002] HCA 54 at [146]
If the court is unable to conclude that a statute does not exclude the imposition of a duty of care, it must then determine whether a duty should be imposed.
McHugh J addressed this issue in the following terms[7]:
[7] [2002] HCA 54 at [78] and [84]
A public body invested with a discretionary statutory power may be in breach of a common law duty of care if it fails to exercise the power for the benefit of an individual or class of individuals. In these cases, failure to exercise the power given constitutes actionable negligence that sounds in damages. In determining whether a public authority has breached a common law duty by failing to exercise a statutory power, it is essential to examine the words and policy of the legislation. That is because the legislation may indicate that the legislature has legislated to cover the field and excluded all common law duties of care. In other cases, the imposition of a common law duty may be inconsistent with or undermine the effectiveness of the duties imposed by the statute. In some cases, the circumstances of the case for example, active intervention by the authority or reliance by the plaintiff may establish a duty of care. But the legislation may give the authority such a wide discretion to exercise the power in question that the tribunal of fact cannot find that the failure to exercise the power constituted a breach of the duty.
...
Where a plaintiff claims that a public authority owed him or her an affirmative duty of care in a situation that has not yet been recognised by the common law, the court must examine a number of matters to determine whether the duty existed. I pointed to these matters in Crimmins v Stevedoring Industry Finance Committee:
.Would a reasonable public authority reasonably foresee that its act or omission, including a failure to exercise its statutory powers, might result in injury to the plaintiff or his or her interests?
.Was the authority in a position of control and did it have the power to control the situation that brought about the harm to the injured person?
.Was the injured person or his or her interests vulnerable in the sense that the injured person could not reasonably be expected to adequately safeguard himself or herself or those interests from harm?
.Did the public authority know, or ought it to have known, of an existing risk of harm to the plaintiff, or in some cases, to a specific class of persons who included the plaintiff (rather than a risk to the general public)?
.Would the imposition of the duty of care impose liability with respect to the defendant’s exercise of ‘core policy-making’ or ‘quasi-legislative’ functions?
.Is there any supervening policy reason that denies the existence of a duty of care?
Callinan J observed[8]:
I return to where I started in this section of my reasons, to the statement of Earl Cairns LC which requires that there be something in all of the circumstances, including of course the terms of the conferral of the powers, which requires that the power be coupled with a duty; or, as Hayne J put it in Brodie, ‘[something in] the whole range of circumstances relevant upon a question of statutory interpretation’; or as Lord Hoffmann put it in Stovin v Wise, irrationality in an abstention from exercising the power or some other exceptional matter, or indicator of an intention to permit a person to sue. Unless these conditions are satisfied, in my opinion no relevant duty of care will arise.
True it may be, that vulnerability, power, control, generality or particularity of the class, the resources of, and demands upon the authority, may each be, in a given case, a relevant circumstance, but none should, I think, of itself be decisive. Nor do I think it convenient or satisfactory to pose a test whether a particular function of an authority involves a core, or a non-core function, or relates to a matter of policy or executive action. Not the only problem about such a test is the inevitable difficulty of distinguishing functions, and the need for statutory authorities to make a political assessment of priorities.
In my opinion, no better test can be stated than that of Earl Cairns LC modified to take account of Lord Hoffmann’s opinion as to irrationality of abstention from exercise, or other exceptional circumstance, and which in form only, but not in substance I would regard as being similar to that of Hayne J in Brodie. It was, it may also be observed, a test which quite clearly appealed to Brennan J in Sutherland as appears from his Honour’s citation of it in that case.
In CLT v Connon[9] Doyle CJ described the approach in the following terms:
The provisions of the statute will again be relevant. But now they are part of the background against which the Court determines whether or not to impose a duty of care. At this stage the nature of the duties imposed by the statute, the relationship between the plaintiff and the person or body upon whom the duty of care is sought to be imposed, the purposes and object of the statutory scheme and other matters will be relevant. It is not just a matter of deciding whether the nature of the statutory scheme is such that it is inappropriate to impose a duty of care in the particular case. It is a question of whether, considering the relationship between the plaintiff and the defendants, including the features of that relationship attributable to the relevant statute, it is appropriate on ordinary common law principles to impose a duty of care.
[8] [2002] HCA 54 at [320]-[322]
[9] CLT v Connon (2000) 77 SASR 449 at [35]

In determining whether the State owed duties of care to Vehicle Auctions and Mr Tarabay, it is necessary consistent with authority to first consider whether the statute negated a duty of care. If the statute did not negate the existence of a common law duty did the requisite relationship arise between the State and a class of persons that called for the intervention by the tort of negligence.
The Legislative Scheme
Within the last decade there has been a nationwide effort to address the issue of car theft in Australia. In 1996 the National Motor Vehicle Theft Reduction Task Force was established by premiers and chief ministers from all States and Territories. The task force was instituted to develop a nationally based strategy to address motor vehicle theft as part of a broader national agenda against crime. The task force implemented a system called NEVDIS[10] for exchange of information relevant to the issue of vehicle theft. This system replaced individual State based information systems such as the CARS[11] system used in South Australia.
[10] National Exchange of Vehicle and Driver Information System
[11] Comprehensive Auto-theft Research System
NEVDIS is a national database that provides access to information concerning all registered vehicles and licensed drivers in Australia. It was implemented in an effort to reduce licence fraud, vehicle theft and vehicle fraud.
The need for reform to the detection of vehicle theft led to amendments to the Motor Vehicles Act 1959 (SA) in South Australia. The Motor Vehicle (Inspection) Amendment Act 1996 introduced amendments granting the registrar of the Department a discretion to inspect vehicles upon application for registration, and a discretion to seize a vehicle where there is a reasonable suspicion that the vehicle is stolen.
The second reading speech provides some insight into the purposes of the amendments and the aims of the amending sections.
This Bill facilitates the introduction of pre-registration identity inspections for new vehicles and the appointment of authorised agents from the private sector to carry out these inspections…
The Bill also facilitates the transfer of vehicle identity inspections that seek to confirm a vehicle is not a stolen vehicle, from the South Australian police to the Department of Transport. This includes vehicles previously registered interstate …The Bill also makes provision for the appointment of inspectors from the private sector for the conduct of the vehicle identity inspections…
As the principle purpose of vehicle identity inspections is to locate stolen vehicles, the Bill proposes that inspectors be provided with the power to seize and detain a motor vehicle, where the inspector has reasonable cause to believe that the vehicle is a stolen vehicle…
Sections 24 and 139 of the Motor Vehicles Act detail the investigative process. The investigation may include a vehicle examination prior to registration in some circumstances. Section 24(2) provides:
The Registrar may refuse to register a motor vehicle pending investigations (which may include examination of the vehicle)—
(a)     to verify any information disclosed in the application or any evidence provided by the applicant in response to any requirement of the Registrar under this Act; or
(b)     to ascertain whether the vehicle—
(i)complies with an Act or law that regulates the design, construction or maintenance of such a vehicle; or
(ii)would, if driven on a road, put the safety of persons using the road at risk; or
(iii)     is or may be stolen.
Section 139 provides;
(ab)where an application to register, or transfer the registration of, a motor vehicle has been made, examine the motor vehicle for the purpose of ascertaining whether it—
(i)complies with any Act or regulation that regulates the design, construction or maintenance of such a motor vehicle; or
(ii)would, if driven on a road, put the safety of persons using the road at risk; or
(iii)     is or may be stolen;
From these sections it would appear that a primary purpose of vehicle inspections is to locate stolen vehicles. If the registrar reasonably suspects a vehicle to be stolen following inspection, the police must be notified immediately and the vehicle seized.[12] As echoed in the second reading speech, locating stolen vehicles and identifying the processes for dealing with them upon location are central to the introduction of these sections of the Act.[13] The powers and functions conferred by the Act allow for a system of registration where vehicles may be inspected for the purpose of identifying stolen vehicles.
[12] Motor Vehicles Act, 1959 s139AA
[13] Second Reading Speech, Motor Vehicle (Inspection) Bill, 27 November 1996 p252;
“As the principle purpose of vehicle inspection is to locate stolen vehicle, the Bill proposes that inspectors be provided with the power to seize and detain a motor vehicle, where the inspector has reasonable cause to believe that the vehicle is a stolen vehicle.”
There is no statutory duty created by the Act that is in conflict with a common law duty of care. There is nothing in the Act that excludes the existence of a duty of care.
Duty of Care at Common Law
Vehicle Auctions
Counsel for Vehicle Auctions submitted that the relationship between the Department and Vehicle Auctions was such that a common law duty of care arose. The content of the duty was said to require the Department to take reasonable care when conducting vehicle checks on interstate vehicles being sought to be registered within South Australia. It was suggested that the Department had failed to act with reasonable care. It was said that as a result a certificate of registration was issued and given public currency. It was said that Vehicle Auctions acted on the registration certificate in this case to its detriment.
Counsel for the State submitted that there was no sufficient relationship to give rise to a duty of care. It was emphasised that the Act provided a warning that a certificate of registration was not evidence of title. It was said that this was a clear statement of caveat emptor. It was said that there was no actual or implied reliance on the part of Vehicle Auctions. To the contrary Vehicle Auctions pursued its own avenues of enquiry in accordance with its standard procedures and practices. Counsel also contended that there was no relationship of dependence between Vehicle Auctions and the Department. Vehicle Auctions was a commercial business well able to assess any commercial risks. It was able to protect itself in a number of ways including the obtaining of warranties of title and if necessary to have those warranties secured. It was able to pass on the risk to third parties such as Vehicle Securities Register if it chose to do so. These circumstances were said to be indicators that negated the existence of a duty of care.
Counsel for the State finally submitted that the policy behind the Act was to seek to restrict the trade in stolen vehicles and to attempt to stop interstate trade in such vehicles. To this end a traditional police function was taken over by the Department. Attention was drawn to the authorities that suggested that police activity is generally an indicator of a circumstance where a duty of care does not arise. It was said that the absence of any contractual arrangement in this instance was another clear indicator that no duty of care arose.
As earlier observed the legislation in the present case did not cover the field and exclude all common law duties of care. Having regard to what has been characterised as police activity the imposition of a common law duty of care may be said to be inconsistent with the statutory scheme and to a degree undermine the effectiveness of the duties imposed by the statute. There is little to support the existence of a duty of care when considering the policy of the statute. There is minimal active intervention by the Department. Generally speaking the Department leaves third parties to transact their business as they may be advised allowing those parties to protect themselves with respect to title. This analysis is supported by the provisions of the Act which spell out explicitly that a certificate of registration is not to be treated as evidence of title. The legislation has provided the Department with a wide discretion as to the exercise and the manner of exercise of its powers. The breadth of the discretion makes it difficult to infer a duty of care. In the present case there is no indication of dependence or reliance by Vehicle Auctions. To the contrary Vehicle Auctions independently took steps to check title.
The indicia that generally could give rise to a duty of care are not present in this case. The legislation and the activities of the Department suggest that such a duty would not arise. The relationship between Vehicle Auctions and the Department does not contain elements of close proximity. There was no indication of general or specific reliance. A situation of dependence did not arise. No duty of care arose in the circumstances of this case.
As earlier observed counsel for Vehicle Auctions alleged that the Department had not acted with due care in its computer search. This submission is without substance. The evidence of Sergent Hackett and Mr Brunoli discussd earlier provide a sound basis for the rejection of the submissions. In any event Vehicle Auctions was well able to inspect the vehicle and satisfy itself about the genuiness of the engine and vin chassis numbers.
Mr Tarabay
Much of the foregoing reasoning is apposite to a consideration of whether a duty of care was owed by the Department to Mr Tarabay. There is nothing in the legislation to relevantly distinguish the position of Mr Tarabay from Vehicle Auctions. Further, Mr Tarabay’s dealings with the Department would suggest that there was no dependence or reliance. Rather than relying on the Department Mr Tarabay set out to defraud the Department. No duty of care arose towards Mr Tarabay.
Further difficulties confront Mr Tarabay. On the balance of probabilities Mr Tarabay was not a bona fide purchaser of the vehicle. Although the evidence does not establish that Mr Tarabay was involved either directly or indirectly in the theft of the vehicle, it is not possible to conclude on the balance of probabilities that he was a bona fide purchaser for value. Mr Tarabay’s evidence was so inadequate that little confidence can be placed on his testimony. The suggestion that he did not know when he purchased the vehicle lacks credibility. The different accounts of the date of purchase are inexplicable. His failure to obtain any form of receipt lacks credibility. The lack of any explanation for the delay in registration impacts adversely on his credibility. In these circumstances a duty of care did not arise.
Conclusion
The above reasoning leads to the conclusion that this appeal must be allowed. The judgment in favour of Vehicle Auctions against the State should be set aside. The claim against the State is dismissed. The cross appeal by Mr Tarabay is dismissed.
LIST OF CITATIONS AS THEY APPEAR IN THE JUDGMENT
1 (1999) 198 CLR 180 at [76] see also Graham Barclay Oysters Pty Ltd v Ryan [2002] HCA 54 per Kirby J at [229]-[244].
2      Perre v Apand at [27]
3 (1999) 200 CLR 1
4      See judgment of Gleeson CJ at [3], Gaudron J at [27], Kirby J at [203]
5 [2002] HCA 54 at [15]
6 [2002] HCA 54 at [146]
7 [2002] HCA 54 at [78] and [84]
8 [2002] HCA 54 at [320]-[322]
9      CLT v Connon (2000) 77 SASR 449 at [35]
10     National Exchange of Vehicle and Driver Information System
11    Comprehensive Auto-theft Research System
12 Motor Vehicles Act, 1959 s139AA
13Second Reading Speech, Motor Vehicle (Inspection) Bill, 27 November 1996 p252;
“As the principle purpose of vehicle inspection is to locate stolen vehicle, the Bill proposes that inspectors be provided with the power to seize and detain a motor vehicle, where the inspector has reasonable cause to believe that the vehicle is a stolen vehicle.”

[2003] SASC 146

23 May 2003