Thompson, John Cranston v J.T. Fossey Pty Ltd

[1978] FCA 56

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CATCHWORDS

Trade Practices - False representation as to quality -

Motor Vehicle - !fDemonstrator!l	- Subsequent amendment
of Act..

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I	Trade Practices Act 1974,	ss. 53(a) & 79
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Trade Practices Amendment Act 1977.

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JOHN CRANSTON THOTPSON v. J. T. FOSSEY PTY. LIMITED

I	(G Nos. 93 & 94 o f 1977 and 5 & 6 o f 1978)
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I	Coram : Franki J.
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I	26 July 1978
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!	Sydney.

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I N THE FEDERAL COURT OF AUSTRALIA	)
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NEW SOUTH WALES DISTRICT REGISTRY ) Nos. 93 & 94 of 1977

& 5 & 6 of 1978

GENERAL DIVISION

BETWEEN : JOHN CRANSTON TEOIrIPSOPi

Informant

- AND : J. T. POSSEY PTY. L I N I T 3

Defendant

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REASONS FOR JUDGMENT: FRANK1 J.

DELIVERED: 26 July 1978

Four informations were l a i d by Mr.

J. C. Thompson

("the informantll), with the approval of the Minister of S t a t e

f o r Business and Consumer Affairs, against J. T. Fossey Pty.

Ltd., ("the defendant") seeking fines under s.79 of the

Trade Pract ices Act 1974 ("%he Act"). The four informations

were heard together by consent. The informations relate to

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two t ransact ions, there being two informatLons i n respect of

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each transaction. A l l informations allege a contravention of

s.53(a) of the Act par t icu lar i sed by al leging that the defendant

being a corporation, i n trade o r commerce, i n connection with

the supply of goods falsely represented that the said goods

were of a par t icu lar standard, qua l i ty or grade. One transactio=

was in relat ion to the supply of a Ford Escort motor car t o a

Mr. Jack Hooson. In r e l a t ion to th i s t r ansac t ion one information

a l leges a false representat ion that the car %as a demonstrator"

and the second information in r e l a t i o n t o this t ransac t ion a l leges

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a false representat ion i n vrri t ing that the car was I I a New

Demonstrator Escort 1.3 Sedan."

The second transaction was i n r e l a t ion t o the supply

o f a Ford Escort motor vehic le to a Mrs. J. Aiken. Both

these informations allege a contravention of s.53(a) o f the

Act in tha t the defendant d id in t rade o r commerce i n

connection with the supply of goods f a l se ly r ep resen t t ha t

the sa id goods were of a par t icular s tandard, qual i ty o r

grade. One informat ion fur ther a l leges tha t the fa l se

representation t o Mrs. Aiken was' t h a t Ira Ford Escort Sedan

Registered No. HXF 535 was a demonstratorlT and the second

information in r e spec t of th i s t ransac t ion a l leges a f a l s e

representation " in writ ingT1 that a Ford Motor Vehicle Registered

No. HXF 535 was a "Ford Escort Demof1. Both transactions took

place before the 1977 amendment o f the Act, although the

informations were	not	lodged u n t i l a f t e r t h e	amendments came
i n t o operaticn.

P r i o r t o the 1977 amendment of the Act, s.53( a) read :

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"A corporation shall not, i n t rade o r commerce,

i n connexion with the supply o r possible supply

of goods o r services o r i n connexion with the

promotion by any means o f the supply	o r use o f
goods o r services -

(a ) fa l se ly represent tha t goods o r services

a r e of a particular standard, quali ty o r

grade,	o r t h a t goods	a r e o f a par t icu lar
s ty1 e	o r model;11

In 1977 tha t sec t ion was amended, so far as is relevant,

so t h a t it now reads :

I T A corporat ion shal l not , in t rade o r commerce,

i n connexion with the supply o r possible supply

of goods o r services o r i n connexion wiYn The

promotion by any means of the supply o r use or^

goods o r services -

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I ( a ) f a l se ly r ep resen t t ha t goods a re o f

a particular standard, quality, grade,

composition, s t y l e o r model o r have

i	had	a par t lculdr his tory	o r par t icu lar
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previous use;”

I The defendant is the authorised Ford dealer a t Tamworth

I	and at the relevant t ime	employed about 70 persons, 10 o f whom
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I	were	engaged	i n t h e s e l l i n g	of	new	and used vehicles. During
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i	1977 the defendant sold approximately	500 new	cars and
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approximately 950 used cars. The defendant was a l so the

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i	rental car l icensee	of Hertz	for renting drive yourself cars.
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i The defendant had some cars which were regis tered f o r

demonstration purposes but which normally did not include

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Ford Escorts. Mr. Keating, the managing d i rec tor , sa id tha t

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! Escorts were a low volume se l l i ng ca r i n the Tamworth area

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I	as a rental car because	it was a popular sized rental vehicle
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I	in the area	and a ren ta l car	was	used t o demonstrate the
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E s c o r t range i f the need arose.

i	Yr. Hooson visited the premises	o f the defendant in
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i	November	1976 f o r t h e purposE of having	a vehicle repaired
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which he then owned. He had a discussion with a used car

salesman, a Mr. Forbes, employed by the defendant and ult imately

on 8 November 1976 he signed a hire purchase document i n

re la t ion to the acquis i t ion by him o f a Ford Escort registered

number HPQ 705. Mr. Hooson drove home i n t h e Ford Escort

having traded in the vehicle	which	he had brought	i n f o r
repair .

There is considerable conflict in the evidence concerning

what was said by Mr. Forbes in r e l a t ion t o t he veh ic l e which

Mr. Hooson acquired. Broadly, Mr. Hooson i n evidence said that

Mr. Forbes t o l d him tha t the vehic le was Ira demonstration Escortr1,

!la demonstration modelrl,rTa good demof1. Mr. Hooson,whilst saying

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that he could not recall every word, denied that Mr. Forbes ever

mentj.oned any use o f the vehicle as a h i r e ca r . Mr. Forbes,

i n evidence, said that he t o l d Nr. Hooson tha t the car was

!lone o f our company ca r s t ha t was registered by our company

and t h a t we used it f o r demonstration and hirepurposes and

tha t t he company personnel had been driving the cart1. Mr.

Hooson signed a hire purchase document addressed t o a h i r e

purchase company, with a branch a t Tarnworth, i n r e l a t i o n t o

the vehicle. The document was a printed document and the

re levant de ta i l s were entered in it by Mr. Forbes. The

document was then signed by Fr. Hooson a s h i r e r and witnessed

by Mr. Forbes. The goods the subject of the t ransact ion were

descr ibed in the document. The printed words i n t h e drxument

were "DESCRIPTION OF GOODS which a r e +New/Second Hand ( I n i t i a l s )

Make and Body Type . . . l1 Fr. Forbes f i l l e d i n t h e words

llDemonstrator Escort 1 .3 SedanI1 a f t e r t he words "Make and

Body Type". The words IlSecond Hand" had been crossed out

and Hr. Hooson had i n i t i a l l e d t h e a l t e r a t i o n . Mr. Forbes,

'in evidence, said tha t he had &ossed out the words ltSecond Hand", although when the company answered questions pursuant

t o a requirement under s.155 of the Act, it had sa id tha t

the person who struck out the words llSecond Hand" was M r .

Hooson. It appears that where a vehicle is less than one

year old the manufacturer's new car warranty applies and t h a t ,

subject to the approval o f the finance company, i n t e r e s t r a t e s

loosely called new car ra tes , were often allowed by the

finance company. Mr. sought t o explain the description

Forbes

of the vehlcle as a !!new demonstratorrt by a l leg ing tha t

the then district manager of the finance company had instructed

him t o f i l l in the hire purchase document i n t h a t way. Mr.

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Keating, the managing director o f the defendant, said i n

evidence that Mr. Forbes had explained the use of the words

he had used t o describe the vehicle by saying that llHe

assumed he should use the word 'new' rather than 'used' on

the hire purchase agreementIr and t h a t Yr. Forbes had t o l d

him t h a t was the only reason he used the word lrnewll.

The d i s t r i c t manager o f the finance company, in

evidence, said that he could not recall any specific discussion

with Mr. Forbes but that he would no t have asked f o r the

vehicle to be described as a Itnew demonstratorr1. He said

IWe would ask t o have it described as used and i f that

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were asked, a new car rate , they would in se r t t he word !

'demonstratorr which has significance only t o our s ta f f" .

He added that the use o f the word "demonstratoi-11 would indicate

t o s t a f f of the finance company tha t the vehic le was still

within new car warranty.	I
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Some t i m e l a t e r NI-.	Hooson found a Hertz rental	l
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agreement in the veh ic l e and, when he sought to re-regis ter

the vehicle, his suspicions were aroused because the registration

f ee on the renewal notice was that appropriate t o a vehicle

for h i re . Mr. Hooson then consul ted his sol ic i tors and,

because it was said that the use of the word rlnewll consti tuted

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a breach of the Hire Purchase Act, 1960 (N.S.W.) it was arranged

that the hir ing charges of $1,584-00 should be remitted, the

ultimate cost being borne by the defendant.

In the circumstances I prefer the evidence of Mr.

Hooson t o t h a t o f Mr. Forbes. I consider that the use o f the

words Ifnew demonstratornr on the hire purchase agreement by

b. Forbes has not been sat isfactor i ly explained and I

consider this is support f o r Mr. Hooson's evidence tha t t he !

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car was represented to him o r a l l y a s a demonstrator. A

considerable amount of evidence was given by Mr. Keating

and Mr. Forbes and other employees o f the defendant

re la t ing t o staff meetings a t which it was said employees

were instructed t o properly describe cars. However, whatever

may be the significance of th i s evidence, i f accepted, i n

r e l a t ion t o any penalty, it does not afford a defence. By

s.84(2) of the Act conduct of a n employee engaged in on

behalf of the defendant is deemed f o r the purposes of the

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Act t o have been engaged in by the defendant.

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The evidence was t h a t a t the time o f the transaction

the odometer in the vehicle , regis tered number HPQ 705, recorded

about 13,000 kilometres and of those 4,862 kilometres had been

recorded during the hire of the car as a Hertz rental car.

No evidence was presented as t o the ex ten t to which t h i s

car had been used a s a demonstrator and Mr. Keating said t h a t

the company would not have any record of it being so used. On the basis of kilometres'travelled the car had been used

to the ex ten t o f about 36 per cent as a rental car , leaving

the remainder apparently attributable t o i t s use as a company

car generally and t o some probable small use f o r demonstration

purposes. I consider that the evidence establishes beyood

reasonable doubt that the vehicle acquired by Mr. Hooson

could not be properly described as a ffdemonstratorff. Wheizher

it could be properly described as a r en ta l ca r may be another

question but it does not arise in these proceedings. It i s

f a i r t o add t h a t the car appears	t o have given	Mr.	Hoosm
sat isfactory service.

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The next two charges a r e i n r e l a t i o n t o a Ford E s c o r t

vehicle, registered number HXF 535, which had been acyuirec?

by Mrs. J. Aiken on l 5 February 1977. She said that she had had

previous dealings with the defendant and t h a t when she vis i ted

the defendant's premises on 11 February 1977, the car which

she acquired had been represented t o her by a salesman, Mr.

T. McDonald, a s a demonstrator which had come onto the f l o o r

several days previously. Mrs. Aiken sa id , i n evidence, that

she had asked Mr. McDonald whether he had anything i n t h e

way o f a small second hand car sui table f o r her daughter. She

had said that she wanted a r e l i ab le ca r t ha t Mr. McDonald could

personally recommend. Mrs. Aiken sa id tha t there had been

some discussion about rental cars and t h a t a t the time o f Mr.

McDonald' S 'representation she had said "I would not touch a

ren ta l car in a f i t" . Mr. was not called in evidence.

McDonald

A t the time o f her first enquiries Mk.fkDonald had given Mrs.

Aiken a note o f the transaction he proposed. The note was

signed by him and described the vehicle as a "Ford E s c o r t Demo".

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In answer t o a requirement f o r information under s.155 of the

Act the defendant said ''Our salesman, Terry McDonald, admits

tha t he s o l d the vehicle as a demonstrator because, a t the

! time, he b lieved it t o be one". The car which Mrs. Aiken

I	acquired was admitted by Mr. Keating i n evidence t o have been
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I	"One o f our Hertz cars" and t o have r corded 5,302 kilometres
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of the 6,770 kilometres recorded on the odometer a t t h e time

. of the transaction as a Hertz rental car. Mr. Wright, the

sa les manager and a director o f the defendant, said in evidence

t h a t on numerous occasions the vehicle was llsed as a demonstrator.

However, it seems-clear that the major and substantial purpose

f o r which th i s vehic le was used by the defendant was as a

ren ta l car and t h a t it is established beyond reasonable doubt

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t h a t it could not properly be described as a demonstrator.

This car , apar t from an oi l leak evident a day o r two a f t e r

the car had been acquired, also appears to have given

sat isfactory service.

A t the close of the case f o r the informant, counsel

Tor the defendant submitted that there was no case to answer.

The basis f o r t h a t submission was tha t there was no evidence

of any false representat ion that the goods were of a par t icu lar

standard, quality o r grade. Counsel f o r the informant relied

on the word I1qualityf1 and the case proceeded upon the bas i s tha t

the question was whether o r not there had been a false represent-

a t ion tha t e i the r of the cars was of a par t icular qual i ty .

Counsel f o r the defendant argued that one should look

t o the words of the amendment which included the expression

"have had a par t icu lar h i s t o r y o r par t icular previous usef1 in

interpret ing the meaning of the word l lquali tyll and that i f one

could look t o the amendment then it was c lear tha t the word

l lquali tyll o r I1particular qualityt1 d id not include a par t icu lar

previous use and that the basis o f the charges was that a

par t icular use o f the two vehic les in each case had not been

as a demonstrator but as a drive-yourself car.

I found that there was a case t o answer.

I considered the meaning of the expression Ifparticular

qualityll i n r e l a t i o n t o whether o r not the number of miles a

vehicle had travelled described a pal-ticular quality of that

I vehicle. I decided i n Given v. -

Limited (1977) 15 A.L.R. 439 t h a t it did and In tha t case I

s a i d a t p.442 :

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!'The words ' o f a par t icu lar qua l i ty ' in

S 53(a) have t o be read m their context .

I do n o t consider it is possible to

define the word 'qual i ty ' even i n t h a t

limited context. Its meaning must be

ascer ta ined in re la t ion t o the goods

whose qual i ty 1s being considered, and

this i s par t icu lar ly c lear when one

looks a t the def ini t lon of lgoodsl in

S 4 o f the Act where goods are def inied,

unless the contrary intention appears,

as including :-

' ( a ) ships, a i r c r a f t and other vehicles;

b animals, including fish;

L 1 minerals, trees and crops, whether

on, under o r attached t o land o r

not; and I

(d) gas and e l e c t r i c i t y ; '

This case i s concerned with a uar t icu lar

qual i ty of a motor vehicle. The Shorter

Oxford Dictionary gives the following

meanings amongst others, f o r ' qua l i ty ' in

r e l a t ion t o things - : 'An a t t r i k t e , o r o p e r t v , - - - - .

special feature. The nature, kind o r

character (o f something).'

In my opinion the number o f miles a pa r t i cu la r

vehicle has travelled describes a par t icu lar

a t t r i b u t e o r a special feature o f that vehlcle ,

and therefore describes a par t icu lar qua l i ty

of that vehicle .

I did not think, nor am I now of the opinion, that

the words llqualityll o r "@ar t icu lar qua l i ty" in tha t sec t lon a re

ambiguous.

There is some considerable authority for the proposit ion

t h a t , i f the words o f a s t a t u t e a r e ambiguous, it is pel-missible

t o examine a l a t e r s t a t u t e t o determine whether it throws any

l i g h t upon the construction of the earlier statute. However,

it seems that a condition which must exist before this is

permissible, even where t h e l a t e r Act contains a provision

t h a t it i s t o be construed as one with the ear l ier Act , i s

t ha t t he meaning of t he ea r l i e r s t a tu t e must be ambiguous.

In Kirkness v. John Hudson C% Co. Ltd . 11955A A.C. 696 -

a t pp .710-714 it was said by Viscount Slmonds ( a t p.712) i n

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r e l a t i o n t o this matter that words are not ambiguous unless

the Judge thinks they are ! ' fairly and equally open t o diverse

meanings!!. See a l so In r e IJlacPIanaway and In r e The House of

Commons (Clergy Disqualificatlon) Act, 1801 E953 A.C. 161 a t

I pp. 177-1 78.

I cannot see why the prerequis i te of an ambiguity should

notnapply when it i s sought t o use an amendment t o an Act t o

assist in the in te rpre ta t ion o f the or iginal Act. I think a

Court should be Careful not t o assumethat the legislature has

not amended the Act fo r t he purpose of c la r i fy ing it i n t h e eyes

of the layman. A s was said by the Privy Council i n I n r e Samuel

"It is not a conclusive argument a s t o

the constrvction o f an e a r l i e r Act t o

. say that unless i t . b e construed in a

par t icu lar way a l a t e r enactment would

be surplusage. The l a t e r Act may have

been deslgned, ex abundante cautela,

t o remove possible doubts.!!

It seems c l ea r t ha t , if words i n a s t a t u t e which are the basis

f o r c r imina l l i ab i l i ty , as are those in s.53(a) o f the Act, a r e

! ambiguous the Court should be-careful t o resolve the ambiguity

I	i n favour of the	person	charged.	I	dea l t w i t h t h l s pr inciple
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of construction in Thompson v. Mzstertouch T.V. Services Pty.Ltd.

(1977) 15 A.L.R. 487 a t pp.496-497. In the l i gh t o f the

I p r inciples I have enunciated I do not th ink tha t in the p resent

case there i s any scope for using the 1977 amendment t o the

Act a s a guide t o the interpretat ion o f the words !Iqualityl1

o r !!particular quality!! in s.53( a ) o f the Act a s it was before

the 1977 amendment. However, it is not s t r ic t ly necessary for

me t o go th i s f a r because, as I have said, I consider that

there is no ambiguity in the words I1quality1! o r '!particular

qual i tyf1 in s .53(a) as the sect ion s tood a t the relevant time.

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I add that I have not overlooked Lcvcridgc v. McCak E954 -

N.Z.L.R.	855 and Sullivan v. Hamel-Green F973 V.R. 156.
The question then becomes whether the description

o f the vehicles as demonstrators was a false representat lon

of a qual i ty o r a par t icu lar qua l i ty of the vehicles. I

consider that t o ca l l a vehicle a demonstrator is t o describe

an a t t r i b u t e o r special feature of the vehicle and following

my reasons in Given v. C.V. Holland (Holdings) Pty. L t d . ,

supra, I hold that the charges alleged i n each information

have been established according t o the standard o f proof

required in criminal cases.

Because I agreed a t the hearing t o publish my

reasons and then allow an adjournment for the defendant to decide what it wished t o advance on the question of penalty

I	adjourn the further hearing	of	these matters.
Associate

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