Re Linda Martin v Horseless Carriages Pty Limited [1984] FCA 279 (28 September 1984)

FEDERAL COURT OF AUSTRALIA

Re: LINDA MARTIN
And: HORSELESS CARRIAGES PTY LIMITED
No. G.8 of 1984
Consumer Protection

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Wilcox J.

CATCHWORDS

Concumer Protection - Misleading conduct - Consignment of car for sale by respondent.

Promise as to costs to be charged to applicant - Claim by respondent for payment of larger sum for costs - Assertion of lien until higher amount paid - Whether misleading conduct - Breach of contract.

Advice to respray car - Whether misleading conduct - Assessment of damages.

Trade Practices Act, 1974 ss.52, 53(d) and (e)

HEARING

SYDNEY
28:9:1984

ORDER

Judgement for the applicant in the sum of Ten thousand two hundred and fifty dollars ($10,250.00).

Order that the respondent pay to the applicant her costs of the proceedings.

Direct that the exhibits be returned if no appeal is filed within 21 days of this date.

DECISION

This case, which arises under the Trade Practices Act 1974 and the law of contract, concerns the consignment for sale of a motor car, rare in Australia: a 1979 Chevrolet Corvette Stingray. The applicant, Linda Martin, is an American who married a member of the Australian Navy and came to live in Australia in May 1982. She brought with her the vehicle and had it converted to right hand drive and registered in Australia.

In January 1983 Mrs Martin decided to sell the car. Her husband, Michael Martin, was about to leave for overseas naval duty and she proposed to visit her parents in America during his absence. Mr Michael Martin called into the premises of the respondent, a company which operated a used car sales yard in Parramatta Road, Concord, which yard specialised in unusual and expensive motor cars, particularly sports cars. Mr Martin showed a photograph of the car to Mr David Gray, the Sales Manager, and to Mr Ronald Hunter, Managing Director of the respondent. The two men asked Mr Martin to bring in the vehicle. At that time the car was coloured blue, the paintwork being slightly faded and with a few small marks, especially on the nose. Mechanically, it was in good condition. It was registered until 16 July, 1983.

On 4 February 1983 Mr and Mrs Martin returned to the yard with the vehicle. They saw Mr Gray who called Mr Hunter to inspect the vehicle with him. The evidence is not completely clear but it would appear that Mr Hunter left Mr Gray to negotiate with Mr and Mrs Martin. Mr and Mrs Martin indicated that they wished to obtain $25,000 for the vehicle and Mr Gray was not prepared to make any offer at that price. He did, however, suggest that the car should be left on consignment at the yard, that is the yard would attempt to sell the car on their behalf so as to return to them $25,000. According to Mr Martin, Mr Gray said that this was a "quite reasonable" price to seek. He indicated that it would be desirable for certain minor work to be done to improve the presentation of the car and also said that, if the car did not sell within three weeks, it would be desirable to discuss the possibility of respraying the car because, "a lot of people who would want to put that amount of money, $25,000, into a car, they want a car to stand out and look flashy from the rest of the cars around the place". There was no discussion as to what would happen if the car was not sold or if Mr and Mrs Martin did not agree to a respray.

The car was left at the yard on that day. Mr Gray wrote out, signed and handed to Mrs Martin a receipt for the car which included the following:

"Horseless Carriages Pty Limited Parramatta Road, Concord

Accept this vehicle on consignment at a nett figure of $25,000 upon the sale of said vehicle the above coy also agrees to repair paint faults, the front nose and panel, repair damaged front seat, detail vehicle ready for sale at no cost to Mrs Martin". (Mr Gray's emphasis)

Mr Martin sailed from Sydney during late February or the first two days of March. The applicant had left Australia for America about one week earlier. She had left with her father-in-law, Mr John Martin, her Power of Attorney to deal with the sale of the car during her absence. During the period between 4 February and his departure, Mr Martin passed the yard reguarly each day in travelling to Garden Island but, he says, he did not see the car in the yard at all. On two occasions he called into the yard and was told that the car was not in the yard because of interest by a Mr Lord, who was endeavouring to arrange the necessary finance and insurance.

Mr Michael Martin's ship sailed from Sydney to Melbourne. Whilst he was in Melbourne he had a telephone conversation with his father in relation to the car, resulting from a telephone conversation between Mr Gray and Mr Martin Snr. Mr Gray had informed Mr Martin Snr that the prospective sale had fallen through and had expressed the opinion that it would be desirable to have a colour change. Mr Martin had asked how much this would cost and Mr Gray had replied that the overall cost would be $1,500 of which Mrs Martin would be required to pay half. According to Mr Martin Snr, Mr Gray added "the boss will pay the other half, because he is still interested in buying the car". Mr Martin Snr indicated that he wished to consult his son and Mr Gray asked that Mr Martin Jnr telephone him to discuss the matter.

Mr Michael Martin telephoned Mr Gray from Melbourne. He gave evidence, and this is not disputed, that Mr Gray quoted the total cost of repainting as being $1,500, of which Mrs Martin would be expected to pay half. According to Mr Michael Martin, Mr Gray indicated that the other half would be borne by the company because Mr Hunter wanted to purchase the car. He says that he asked why it was that, if Mr Hunter wanted to change the colour of the car, his wife was expected to pay for it and Mr Gray replied that they "cannot have everything our own way". Mr Gray says that he told Mr Michael Martin "that a change of colour would give it a better chance of selling". He denies saying to either Mr Martin Snr or to Mr Martin Jnr that Mr Hunter was interested in purchasing the car for $25,000 and Mr Hunter has given evidence that at no time was he interested in purchasing the car otherwise that "at a wholesale price"; a price which I infer to be well below $25,000.

Following the telephone conversation between Mr Gray and Mr Michael Martin the car was resprayed, red with a black stripe. The actual cost incurred, according to Mr Hunter but for reasons not explained, was $1,800, not $1,500. The vehicle was then put on display.

Mr Martin Snr called into the yard shortly after the respray to arrange for a photograph of the car to be taken. He thought that the vehicle would be sold before his son and daughter-in-law returned and he wished them to see the appearance of the car after the respray. Thereafter, and before the return to Australia of his son and daughter-in-law he, according to his evidence, telephoned the yard on a number of occasions to enquire as to the position. At one stage he was told that there was a person interested but that fell through. On many occasions, according to his evidence, he asked for Mr Gray and was told that he was unavailable and Mr Gray did not return his call.

Mrs Martin returned to Australia on 15 June, her husband on 20 June. She met him at the dock and, on their way home, they called into the sales yard. They asked for Mr Gray but he was unavailable and they had a conversation with Mr Hunter, Mr Gray joining them after a short time. The car was on display in the yard. Mr Hunter told them that it had not been sold. According to him, Mr Michael Martin asked Mr Hunter "how come (he) had not bought the car like he said he was going to do?" and Mr Hunter said that he never had any intention of buying the car. Mr Hunter said that they might need to think about a more realistic price. Mr and Mrs Martin asked him how much they owed him if they took the vehicle out of the yard and he replied $3,000, a sum which he claimed to have spent on the car. At the time Mr Hunter had a paper in his hand with items of expenditure and this document is, presumably, the stock card which was subsequently tendered before me (Ex 8). This document details the following work:

"Detail $100 Tune service 187 Trim repairs 112 Demist air cond service 97 Paint . . . 1,800 Brakes, disc,h-brake 142 Detail 100 Pin stripe 84 Paint . . . cracks 400"

The total of these items is $3,022.

The item for painting, $1,800, was the item discussed between Mr Gray and Mr Michael Martin. There had been no discussion about the brakes ($142) or air-conditioning ($97). The remaining items, Mr Hunter conceded, were covered by the terms of the original agreement. Mr and Mrs Martin disputed their liability to pay more than $750, one half the quoted cost of the respray, but Mr Hunter insisted that they should pay $3,000 if they wished to remove the car.

Mr Hunter was asked about this attitude:

"Q So that when you asked for $3,000, you in fact were asking for more

than you were entitled to?

A I would not say I was asking for more than I was entitled to, I did my best to sell that car.

Q But you had agreed to bear those costs yourself. It is in effect a business risk you took?

A I did ask for $3,000, yes.

Q You had previously told us you agreed to bear the cost of the

matters stated in the consignment notice?

A Yes.

Q So you took that risk?

A Yes.

Q So you tried to get more money but you did not get it?

A Yes."

Mr Hunter claims, and Mr Martin denies, that during this conversation Mr

Hunter offered to purchase the car for $20,000, from which would be deducted the $3,000 claimed by Mr Hunter. I am not satisfied that there was any such offer made.

In the event, Mr and Mrs Martin decided to leave the car at the yard in the hope that a buyer would appear. They indicated that they would be prepared to lower their price to $23,000. However, no sale eventuated. Mr Martin sought advice from various organisations as to his position and was told that there was nothing he could do about it. He therefore obtained $3,000 in cash and returned to the yard with the applicant on 11 July 1983, with the intention of attempting by negotiation to reduce the amount which he had to pay to obtain release of the vehicle. There was a discussion with Mr Hunter during the course of which Mr Hunter, on his own admission, became heated and threatened to break the windows of the car and kick in the door panels. In the end, Mr and Mrs Martin agreed to pay $2,000. Mr Martin was cross-examined as to their reason for this agreement.

"Q You did have $3,000 in your pocket if all failed?

A Yes.

Q Your object was to try and knock it down on that figure?

A Yes.

Q And you achieved it?

A Yes.

Q You know all the time he had been saying: 'I have spent $3,000 on

the car'.

A Yes.

Q You know that he also had a piece of paper on which he was saying:

'It is written down here'?

A I did not ask him. The main reason we said we would give him $2,000 was because of this supposed paint job he had done for us, that we had said yes for the cost of $1,800 and I was not going to pay for any of the supposed mechanical repairs that he had done without my consent. That was why I would not go any higher than $2,000.

Q That is not right. You were prepared if all else failed to hand over $3,000 on 11 July if you could not negotiate a lower price because you had that money with you for that purpose.

A That was my car, our car, sitting in somebody's car sales yard and I wanted it.

Q All I am saving without any criticism is that you were prepared if you could not negotiate a lower figure to pay over the $3,000 for the purpose of recovery?

A No, I was not prepared to pay out, I only had $3,000 which we had already ----

Q When I say pay over $3,000 I meant hand over $3,000.

A Yes.

Q But you were prepared to do that if all else failed?

A Yes."

Mr and Mrs Martin handed over $2,000 in cash and Mr Hunter then gave to them

a receipt for that money showing the payment was being for "repairs, painting etc to above Chevrolet car, paid in full $2,000, balance nil".

According to both Mr and Mrs Martin, the electrical system in the car was not working when they took delivery of it. However this was easily fixed without expense to them. More importantly, they noticed defects in the paint work. They drove the car home to Penrith and, within two or three days, took it to a local workshop, Don Pellatt Repairs. The vehicle was examined by Mr Stephen Tribe, a qualified motor mechanic who has had considerable experience in supervising repairs, including body repairs to vehicles. Mr Tribe gave evidence that upon inspection he found that the vehicle had been repainted from its original colour. He described the paint job as being "less than the standard you would expect for a vehicle of that type". He said that the vehicle had not been completely stripped of its exterior hardware and rubbers to be painted so that there was a lot of overspray on rubbers and the paint work showed signs of blistering or pimples. There was evidence of the old blue colour underneath the door rubbers and around the bonnet and other openings. The applicant said in evidence that she and her husband did not have the money to carry out repairs.

Even prior to regaining possession of the vehicle, Mr Martin had taken steps to find a buyer. He put notices up at Garden Island, where he was then stationed, and arranged for friends to put up notices in other depots. After he obtained the release of the car he advertised its availability for sale in the "Daily Telegraph" and he made enquiries through a friend, who ran a tyre business at Penrith and who was in contact with motor dealers. He contacted some dealers whose names were suggested by this friend.

As a result of this activity a motor vehicle dealer, Mr Ken Greaves, came to see the car. Mr Greaves closely inspected the car. He said in evidence that he noticed some blisters in the duco mainly in the red paint on the top of the bonnet, the top of the mud guards and the boot. He said that, in addition, there were a couple of places where the respray had missed and where he could see the blue colour. The defects were not obvious from a distance but were obvious on close inspection and they influenced him as to the price which he was willing to offer for the car. Mr Martin offered to accept $20,000 but Mr Greaves said that this was too high. He undertook to make some enquiries and eventually offered $16,000 which was accepted and paid on 18 July, two days after the registration had expired. In cross-examination Mr Martin gave this evidence:

"Q You knew you were not getting the best price that you might achieve if you hung on a bit?

A Yes, that is right, sir.

Q Because of the delays which have occurred you wanted to sell this

car and realise the money you needed?

A Everytime we kept it, it was costing us more money. Registration was just about due; insurance was due; we got a letter from the insurance company saying they would not cover it any more. That was the cheapest one around Sydney we could find to do it. So everytime we kept it, it was going to cost us more money and we did not have the money, as I said before."

Mr Greaves decided to keep the vehicle for his own use, at least for the moment. He put a new exhaust system on the vehicle, at a cost of about $200, and purchased American style magnesium wheels which, with tyres, cost about $1,200. He renewed the registration and he buffed out some of the paint blisters. This did not eliminate all the paint defects. Mr Greaves thought that the only way to do this would have been to respray the vehicle again.

Mr Greaves was in Canberra in August 1973 and visited the premises of Turin Motors, a business conducted by Mr Brian Hall. Mr Hall saw the Chevrolet Corvette and urged Mr Greaves to sell it to him. Mr Greaves did so at a price of $20,500. Mr Hall's evidence was that when he purchased the car it had no paint bubbles, that there was no mis-matching of paint and that it was not possible to see blue paint under the rubbers. Notwithstanding this, he maintained that he could tell that the colour had been changed. Despite several attempts he did not succeed in explaining how he had achieved that feat. I found his evidence unsatisfactory and, in relation to the condition of the vehicle, I prefer the evidence of Mr Tribe and Mr Greaves both of whom impressed me with their carefulness of observation and evidence.

Mr Hall kept the car, as his own vehicle, for some months. In March 1984 he displayed the car at the Canberra Motor Show, with the result that it was sold to a private purchaser for $25,000.

Counsel for the applicant relies upon ss.52 and 53(e) and (f) of the Trade Practices Act, 1974. He says that, in relation to each of three matters, the respondent engaged in misleading or deceptive conduct, in breach of s.52, and made false or misleading statements with respect to the price of and need for goods or services. Alternatively, he alleges breach of contract.

The first of the three matters relates to the representations made by Mr Gray, on behalf of the respondent, when the car was taken on consignment. The representation, counsel argues was that the repairs contemplated by the consignment would be at no cost to the applicant whereas, in the event, the respondent demanded money from the applicant in relation to those repairs as a condition to re-delivering the vehicle to the applicant. Secondly, it is said, that the conduct of the respondent offended against ss.52 and 53 of the Trade Practices Act, and constituted breach of contract, because it was agreed between Mr Gray, on behalf of the respondent, and Mr Michael Martin, on behalf of the applicant, that the repainting would be carried out on the basis that only $750 would be demanded from the applicant as her share of the cost of that repainting whereas, in the event, a claim was made which included a figure of $1,800 for repainting. Thirdly, it is said, there was conduct contrary to the Trade Practices Act and in breach of contract in that Mr Gray represented to Mr Michael Martin that repainting would result in a purchase by Mr Hunter of the car or, alternatively, would enhance the prospects of the sale of the car.

The first two matters can be considered together. The essence of these claims is that the arrangement between the parties was such that the total sum payable by the applicant in respect of work done to the vehicle whilst it was in the possession of the respondent was $750. Mr Hunter demanded $3,000, received $2,000 and, so the argument runs, the applicant is entitled to recover the difference between the amount paid and the amount which was properly payable, that is $1,250.

Counsel for the respondent does not contest that the conduct complained of in respect of these two items is capable of amounting to conduct in breach of ss.52 and 53 of the Trade Practices Act and of being a breach of contract. I think that this tacit concession was correctly made. It is, no doubt, correct to say that the making of a promise in trade or commerce which is not subsequently honoured may not, by itself, constitute misleading or deceptive conduct: see Bill Acceptance Corporation Ltd v GWA Limited [1983] FCA 269; (1983) 50 ALR 242. But, upon the applicant's case, the respondent did more than promise that no charge would be made for the initial work and that the charge for the repainting would be confined to $750. Through Mr Hunter, it asserted an entitlement to retain possession of the car, in effect a lien, until $3,000, later $2,000, was paid to it. An unjustified insistence by the respondent upon a claim for possession, in derogation of the applicant's right, can properly be described as misleading conduct in the course of its trade as a motor dealer. Upon the applicant's case it was also in breach of the two contracts made by Mr Gray, on 4 February and in the Melbourne telephone conversation respectively. Counsel for the respondent argues, however, that the applicant's case should be rejected for two reasons. The first of these, which goes only to the discussion of 4 February, is that, upon its proper construction, the consignment note provided for the work to be done at no cost to Mrs Martin if, but only if, the car was sold by the respondent. He argues that it is implied in the consignment note that Mrs Martin will be responsible for any expenditure in fact incurred by the respondent in relation to the work there contemplated in the event of the vehicle not being sold. Secondly, he says, there was in any event a negotiated settlement of the claim for expenses, in the sum of $2,000, so that the applicant is precluded from seeking to recover the moneys which she has paid.

I have set out above the relevant terms of the consignment note. The obligation by the respondent to carry out the itemized work is an obligation "at no cost to Mrs Martin". There is nothing in the consignment note to suggest that, in the event that the vehicle is not sold, Mrs Martin will be liable to pay to the respondent the cost of carrying out the work. Counsel for the respondent suggests that there should be such an implication because, as the applicant would realise, it would be inconceivable that the respondent would agree to carry out work on a vehicle for which it would not be reimbursed either by making a profit on the sale or by payment in the event of the car not being sold. I do not accept this submission. Mr Hall, who has been in the motor business for 17 years and who has conducted Turin Motors, a second hand motor business specializing in high performance cars, for 6 years gave evidence of the drawing power of a Chevrolet Corvette car:

"They are a good car and you put them on the front line of your car yard and they sell other cars. They are a difficult car to sell but they look fantastic.

Q They are a draw card?

A They are a draw card.

Q They get people to come in?

A Very right.

Q You are glad to have one in your yard?

A Yes I am.

Q Even though it may take a long time to sell?

A Yes."

There were two advantages to the respondent in taking the applicant's car on

consignment. The first advantage was that spoken to by Mr Hall, namely that the vehicle would act as a draw card to induce people to visit the yard. They may not ultimately be interested in purchasing the Chevrolet Corvette but may become interested in purchasing some other vehicle which is available for sale. The second advantage, of course, is the chance of the respondent making a sale of the vehicle at a price which yields to it a profit, after paying out the applicant her $25,000, without incurring the risk, or holding charges, involved in the purchase of the vehicle. The work originally done, after delivery of the vehicle on consignment, apparently consisted of the first three items in Mr Hunter's stock card to a total cost of $399. This work was directly related to improving the presentation of the vehicle and was the work which the parties contemplated would be done at no cost. Mr Hunter conceded that he did not expect to be reimbursed for these items:

"Q And were you aware that Mr Gray had made certain agreements with Mrs Martin and Mr Martin about the work to be done to his car?

A Yes.

Q Could the witness be shown this? Had you in fact seen a copy of this

consignment note?

A Yes I have.

Q You were aware, were you not, that that work was to be done at no

cost to Mrs Martin?

A Yes.

Q And in fact the cost was to be borne by yourself?

A That is right.

Q And the costs of so doing, of carrying out that work, were in fact

entered by you onto the stock card, were they not?

A Yes.

. . . .

Q It was not something you expected the Martins to pay?

A No."

The same situation applies to the cost of the painting, over and above the

$750 which Mr Martin agreed to pay. Mr Gray, in his evidence, agreed that he had told Mr Martin that the total cost would be $1,500 of which Mrs Martin would be required to pay $750. Nothing was said about the possibility of the balance being borne by Mrs Martin in the event that the car was not sold. Once again, I think that there was an obvious motive for the respondent to be prepared to accept part of the expense of the repaint. The vehicle, newly repainted in red with black stripes, would be much more "flashy" than before and consequently a better drawcard. Furthermore, both Mr Hunter and Mr Gray appear genuinely to have held the opinion that repainting would improve the chance of re-sale. In these circumstances I do not think that it would be correct to imply into the agreement between Mr Gray and Mr Martin any term that in the event of the vehicle not being sold then the whole cost of the repainting should be met by Mrs Martin.

In relation to the second submission for the respondent, it is I think necessary only to bear in mind the circumstances of the payment of the sum of $2,000. At the first discussion between Mr and Mrs Martin and Mr Hunter, after their return from overseas, Mr Hunter had indicated that he required to be paid $3,000 before he would release the vehicle. Mr Martin was unhappy about this and sought advice but took the view that it was essential for him to obtain possession of the vehicle and that he would have to pay whatever was necessary to achieve this purpose. The discussion on the second occasion can hardly be regarded as a fair and equal negotiation between the parties for a resolution of their differences. Mr Hunter was in the position of controlling the possession of the vehicle: unless Mr and Mrs Martin agreed to his demands then they would not obtain possession of the car and would not have any opportunity of selling the vehicle for themselves. They were in debt and could not afford to renew the registration and insurance. They yielded to duress.

Both the submissions put by the respondent in respect of the claim for repayment of the sum of $1,250 should be rejected.

The third claim of the applicant is for recovery of the sum of $9,000, being the difference between the sum of $25,000 at which the car was delivered on consignment to the respondent and the ultimate sale price of $16,000. The applicant argues that the respondent, through Mr Gray, engaged in deceptive or misleading conduct and made false statements in representing to the applicant, through her husband, that if the car was repainted then Mr Hunter would purchase the vehicle. Alternatively, she argues that, even if there was no specific representation that Mr Hunter would purchase the vehicle for $25,000, the respondent engaged in misleading conduct in representing to the applicant that a respray at a cost of about $1,500, would improve the prospects of the sale of the vehicle.

Mr Gray denies that he told Mr Martin that Mr Hunter was interested in purchasing the car. Counsel for the respondent has submitted that it is unlikely that any such statement would be made, that Mr Hunter had previously declined the opportunity of purchasing the car and that, if he did wish to purchase it, it would be more likely that he would purchase it and then repaint to the colour of his own choice. Furthermore, the comment is made that the subsequent conduct of the Martins was inconsistent with a belief by Mr Michael Martin that, he having assented to the repainting, the car would definitely be purchased by Mr Hunter.

There is force in the submission put on behalf of the respondent that if Mr Hunter had desired to purchase the car then he could have done so at any time, without raising the matter of repainting. Mr Martin said that, in the telephone conversation with Mr Gray, he asked why it was that if Mr Hunter wanted the colour of the car changed he and his wife had to pay for it and Mr Gray said that they could not have everything their own way. It was put to him that he could have suggested a reduction of the price to allow for the cost of the respray but he said that he did not think of that. That he did not do so may seem strange but I accept Mr Martin's evidence to that effect. He is not an experienced businessman.

Mr Michael Martin was cross-examined as to his subsequent conduct in an attempt to show that it was inconsistent with a belief by him that there had been a definite arrangement for sale:

"Q Was it your expectation at the end of that telephone call that was going to happen was this: the car was going to be resprayed red, or resprayed another colour, and thereupon Mr Hunter was going to buy the car himself. Was that truly your expectation at the end of this phone call?

A The whole trip that I did, I kept in the back of my mind that when I got back home this car would be sold for us.

Q I suppose you had an idea how long the repainting might take?

A No.

Q You would have expected that to be done fairly quickly?

A Yes, especially if the owner of the place wanted to buy the car and

wanted it resprayed.

Q That would be done within a week or two?

A Yes, I would imagine.

Q So at the end of March there would be no inhibition about you

getting your money, would there, according to your expectations?

A I would say yes, that is right.

Q The fact is that it was not until June when you returned that you

made any attempt to raise this question of the promise that had been made on behalf of Mr Hunter to purchase the car?

A What else could I have done, I was out of the country.

Q But you had nominated your father on the spot to deal with this

matter?

A He had tried on numerous occasions to contact Mr Gray and every time he rang up Mr Gray was out of the office, attending an accident across the road or in the car sales yard with somebody, and Mr Gray never once rang my father back and he was supposed to be our Power of Attorney.

Q That is what your father told you?

A Yes.

Q Did he report to you during the time between March and June whilst

you were away?

A Yes, because I kept asking how the car was going. He said, I have not heard; they are not answering my phone calls when I am ringing them.

Q But you had an expectation, did you not, by the end of March you would be getting your money from Mr Hunter?

A I did not know how long the money would take to come through. All I knew was Mr Hunter through Mr Gray had promised to buy the car."

This attitude of mind is consistent with the evidence given by Mr Martin, corroborated by his wife in cross-examination and not denied by Mr Hunter, that when he went to the yard on the first occasion after his return to Australia he asked "how come Mr Hunter had not bought the car like he said he was going to do".

I was impressed with all of the Martins, as witnesses. I felt that in each case the witness was honest and careful, endeavouring to recall the sequence of events as accurately as possible. I have no doubt that Mr Michael Martin is under the sincere belief that he was assured by Mr Gray that if he agreed to the repainting then Mr Hunter would purchase the car.

It is conceivable that Mr Michael Martin was honestly mistaken as to what Mr Gray had said. However, the account of the conversation which he gives is supported by his father's evidence of his own conversation with Mr Gray shortly before that date. During that conversation, according to Mr Martin Snr, Mr Gray said "the boss will pay the other half, because he is still interested in buying the car". I have difficulty in seeing why this comment would have been made if, as Mr Gray asserts, Mr Hunter had never had any intention of purchasing the car or acting other than as consignee in an attempt to find a purchaser. I accept that, in fact, Mr Hunter had no intention of purchasing the car at a retail price but I think that something was said by Mr Gray to both Mr Martin Snr and Mr Martin Jnr about Mr Hunter purchasing the car. Even if this was not a firm promise, as Mr Martin Jnr believed, but merely an indication of a likely event the availability of a claim under s.52 of the Act would not be affected. If, in fact, Mr Hunter had no intention of, and was not interested in, buying the car then Mr Gray engaged in misleading conduct in intimating to either of the Martins either intention or interest. cf. Gardiner v Suttons Motors (Homebush) Pty Limited (1948) 48 ALR 142 at p 153. I think that Mr Gray, and no doubt Mr Hunter, was keen to procure the consent of Mr Martin Jnr to a respray and that he threw in the reference to Mr Hunter in order to obtain that consent.

Even if no specific reference was made to Mr Hunter it was misleading conduct to give Mr Martin Jnr to understand that the contemplated repaint would improve the prospects of sale. Evidence was given by a number of the witnesses about the relationship between the price charged for a respray and the quality of the job which was likely to result. It was common ground that a cheap respray would be likely adversely to affect the value of the vehicle. Mr Tribe, asked the correct procedure for repainting a vehicle a different colour, replied: "It depends on the specific vehicle, because obviously there are horses for courses, and if you are only changing the colour of a cheap vehicle, you do it in the cheapest possible way. If you are going to repaint an expensive vehicle and maintain its value, you are going to do a special job to make sure you get it right". He went on to categorize a four year old Chevrolet Corvette as being an expensive vehicle, and to explain that, in relation to such a vehicle it would be necessary, in changing colour, to do it in such a way as to make it appear that "The vehicle was meant to be that way. So in order to do that, the way you do it is to remove any part of the vehicle which would normally be put over the top of your paint coat such as window rubbers and door rubbers and things of that nature which are going to give away straight away the fact the vehicle has had a colour change. That will also give you a chance to have an edge to your paint which will not lift, cannot get the weather under it. Preparation can go right to the edge of the vehicle rather than the edge of the rubber".

Mr Greaves expressed the view that it made a big difference to a car whether its colour had been obviously changed. He described the Chevrolet Corvette Stingray as something of a specialist car, fairly rare in Australia and, to some extent, a collector's item. He said that if one was going to respray such a car "this should be done in such a way as not to show that it had been resprayed". Asked to give detail about how this was to be done he pointed out that what is done "depends on how much you are paying for a job, because the time involved for a car limits the amount of money spent". Mr Greaves did not have any extensive experience in relation to respray costs but gave a range of $1,800 to $2,500 as "the price which you would pay to have that sort of car sprayed I guess". Mr Hall argued that "the quality of the paintwork is very important to the value of the car".

The decision to respray, the selection of a price for the respraying and the acceptance of the eventual job were all matters undertaken by the respondent. Mr Gray acknowledged in his evidence that he realised that Mr Martin Jnr relied on his expertise and left it to him to choose the method of respraying. Both Mr Hunter and Mr Gray accepted the job done by the spray painter. Presumably, it accorded with the quotation which they had accepted and their expectation as to quality. Although the evidence is rather sparse, there is some indication that a respray at a quoted price of $1,500, or an actual price of $1,800, would not be likely to achieve the standard which, in the opinion of both Mr Tribe and Mr Greaves, was essential in order to maintain the value of a car such as the Chevrolet Corvette. In the circumstances of that particular car, and a projected colour change, it was a misrepresentation - although an innocent misrepresentation - of the position to suggest that the value would be maintained, and the prospects of sale enhanced, by a respray at the envisaged price. Such a statement would probably have been true in relation to a more expensive respray, carried out in accordance with the method advocated by Mr Tribe and Mr Greaves, but it was not true of the standard of respray contemplated by the respondent. Therefore, whether or not there was any holding out of Mr Hunter as a purchaser, the recommendation made by Mr Gray amounted to misleading conduct. In these circumstances, I do not find it necessary to consider whether the respondent is liable to the applicant in contract. I hold that the applicant is entitled to recover, under s.82 of the Act, the loss sustained by her as a result of the misleading conduct of Mr Gray in the conversation with Mr Martin Jnr in relation to the projected respray.

The assessment of the loss suffered by the applicant as a result of the respray is not free from difficulty. In substance, the respray had three interlocked effects. The job which was done, apparently commensurate with the envisaged price, was such as to result in a vehicle which, on close inspection, betraved the fact of the colour change. As Mr Greaves explained, this would be a major deterrent to many purchasers, especially when combined with the fact that the paintwork showed blisters and some unevenness in colouring. The vehicle was a luxury, high performance sports vehicle likely to appeal to persons keen to display their smartness and having a purse which enabled them to indulge that ambition. Such persons would be unlikely to be attracted to a vehicle in blemished condition. In practical terms and barring extreme good luck - as may have occurred when Mr Hall resold in March 1984 - the effect of this particular respray was that the vendor would be likely to have to find a purchaser from amongst those who were engaged in dealing with motor cars and who, like Mr Greaves, could take some action to touch up the appearance before passing on the vehicle to another owner. The evidence clearly establishes that, in the motor vehicle trade, there are two levels of price; a higher retail level at which people will purchase a vehicle for their own use and a lower wholesale level at which dealers will purchase, expecting to profit by resale at the retail level. The effect of what was done was not merely to render the vehicle less attractive but also, and consequentially, to remit Mrs Martin from the retail to the wholesale market. As the vehicle, after respray and until released to the applicant, was offered on the retail market the remittal resulted in delay in sale, ultimately putting Mrs Martin in the position of being forced to sell at a price below that which she would otherwise have been willing to accept. Although $16,000 is a price at the bottom of the range, accepted only because of the particular circumstances, it is a price which she was forced to accept as a direct result of the conduct of the respondent. It was not suggested by the respondent that Mr and Mrs Martin failed to take all reasonable steps to find a purchaser or that on 18 July there was any likelihood, within the near future, of finding a purchaser at a price higher than that offered by Mr Greaves. In the circumstances, I must take the figure of $16,000 as representing the best price which could reasonably be obtained in the circumstances in which the Martins found themselves in mid July 1983.

The more difficult question is to determine the value of the vehicle before the respray was carried out. Counsel for the applicant urges that I should adopt the figure of $25,000 and in this regard he points to the concession made by Mr Hunter, under cross-examination, that $25,000 was a realistic price to put on the vehicle at the time that it was taken on consignment. Mr Hunter agreed that, for good commercial reasons, he would not take in a car on consignment except at a realistic price and that Mr Gray was aware of this. He agreed that he knew that Mr Gray had agreed to take the car in at a consignment valuation of $25,000, that he did not object to that and that, at the time, he thought that this was a reasonable price for the car. Mr Hunter said that when the car was displayed for sale it was at an asking price of either $27,000 or $28,000 and that there had been negotiations with Mr Lord at $26,000.

In response to this argument, counsel for the respondent points out that the fact is that the vehicle did not sell, prior to the repainting, at a price sufficient to return the applicant $25,000. He argues that, in those circumstances, it is not realistic to use the evidence of asking price as evidence of value.

The force of this submission depends upon the extent to which the vehicle was exposed for sale prior to the respray. Mr Michael Martin said in evidence, and he was not challenged, that he used to pass the yard daily during the period before he went overseas and he did not once see the car in the yard. On the two occasions when he visited the yard he was told that it had been put away because of the interest of Mr Lord. His evidence was confirmed by that of his father, who frequently passed the premises in the course of his duties and who said that he did not see the car displayed at the yard at all prior to the colour change.

Mr Michael Martin's ship went directly from Sydney to Melbourne and it was whilst he was in Melbourne that he had the conversation with Mr Gray regarding the colour change. The length of time between Mr Michael Martin's departure from Sydney and the colour change could have been only a few days. There was virtually no evidence on behalf of the respondent as to the display of the vehicle. Mr Hunter merely said that, after the car was taken in, "we did not put the car on the front of the lot because I did not think it was good enough in appearance to be one of the front ones". Mr Gray gave no evidence on the matter.

I have no doubt that, over some period prior to the colour change, the car was displayed in the yard. However, it seems that the duration of display was short and that the vehicle was never accorded any prominence. I am not satisfied that there was such a test of the market as to lead to the conclusion that the original asking price, adopted as reasonable by Mr Gray and Mr Hunter, was not in fact a reasonable estimate of the value of the vehicle prior to the colour change. There is no evidence of any variation in the general market during material times and it is, therefore, reasonable to conclude that the vehicle would have continued to command a retail value of about $25,000 had it not been resprayed. It follows that the loss sustained by the applicant as a result of the respray is the difference between that figure and the ultimate sale price, namely a figure of $9,000. This figure should be added to the total of $1,250 arising out of the first and second claims with the result that the applicant should have judgement in the sum of $10,250 together with costs.