Re Jillawarra Grazing Company v John Shearer Limited [1984] FCA 30 (27 February 1984)

FEDERAL COURT OF AUSTRALIA

Re: JILLAWARRA GRAZING COMPANY
And: JOHN SHEARER LIMITED
No. WA G9 of 1982
(1984) ATPR para 40-441
Trade Practices

COURT

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
Toohey J.

CATCHWORDS

Trade Practices - sale of airseeder - alleged defects interfering with seeding - claim for financial loss - whether alleged representations misleading or deceptive conduct - whether failure to warn potential purchasers of problems associated with use of hydromotor - misleading or deceptive conduct - meaning of "merchantable quality" - whether airseeder reasonably fit for purpose for which required - relationship between misleading or deceptive conduct and breach of implied conditions of merchantable quality and fitness for purpose - meaning of "personal, domestic or household use or consumption" - claim for breach of express warranties

Trade Practices Act 1974 ss. 52, 55, 68, 71, 74B 74 and 74G

HEARING

PERTH
27:2:1984

ORDER

1. The applicant's claim be dismissed.

2. There be paid out of Court to the respondent's solicitors the money paid into Court by the respondent.

3. The question of the costs of the application be adjourned to Chambers.

DECISION

Introduction

2. The hearing of this application has followed a somewhat chequered course. It began in May last year but, due to several unduly conservative estimates of the time the matter was likely to take, the hearing became fragmented and the evidence did not conclude until late September. By that time I had a substantial commitment for three months which made it impossible to find the number of days thought necessary for final addresses. Counsel accepted a suggestion that they prepare addresses in the form of written summaries and speak to those summaries when time became available.

3. This proved a useful course, particularly as the length of the summaries made it clear that oral addresses would have taken more than a week. Time became available in December and counsel spoke to their written submissions over a period of 2 days.

The Parties

4. I shall say something about the parties involved in this application. Jillawarra Grazing Company ("Jillawarra"), the applicant, is a firm engaged in farming around Geraldton. The principal of the firm is Vaughan Charles Bunter. It was Mr. Bunter who conducted dealings on behalf of the applicant with the respondent and it was he who gave the principal non-technical evidence on the applicant's behalf. Any reference in these reasons to Mr. Bunter may be taken as a reference to the applicant.

5. Mr. Bunter has been farming since 1958 and, apart from one year in the Northam area, he has farmed around Geraldton, first at Mingenew and later in the Chapman Valley. He is an experienced wheat and sheep farmer.

6. The respondent, John Shearer Limited ("John Shearer"), is a well known manufacturer of farm machinery. It has a national and international reputation for its products.

The John Shearer Airseeder

7. This application is concerned with a John Shearer airseeder bought by the applicant from the respondent.

8. The airseeder represents a significant development in farm machinery and is now used by many farmers instead of the conventional seed drill or combine. It is both a cultivating and seeding unit.

9. The John Shearer unit comprises a hopper, holding grain and fertilizer. The specifications list its capacity as 1220 kg of wheat and 1630 kg of fertilizer. The hopper is mounted on a chassis and wheels and is drawn by a tractor. In turn the airseeder draws a cultivator bar; a 79 tyne Fieldspan is standard for this unit. The movement of grain or fertilizer is activated by a fan or blower driven by air pressure. The material is propelled from below the bins through a series of primary hoses, each feeding a sub-divider head, which in turn feeds a number of sowing tynes through secondary hoses. The case proceeded on the basis that on a standard unit there are 10 primary hoses and 100 secondary hoses. I express it that way because I note that the brochure (exhibit 1) refers to 10 primary hoses, "each subdividing into eight secondary hoses".

10. Usually the source of motor power for an airseeder's fan is a power take-off on the tractor. However some tractors are not equipped with power take-off; in that event the operator of the airseeder is dependent on another source of power - petrol motor, diesel motor or hydromotor. In the present case a hydromotor was fitted to the tractor and this factor played a large part in the evidence and in the arguments presented to the court.

11. It will be necessary to say more about the structure, mechanism and operation of the John Shearer airseeder but the description just given is enough to depict the type of machinery with which this application is concerned.

The Claim

12. The claim is for damages for misleading and deceptive statements, in contravention of ss. 52 and 55 of the Trade Practices Act 1974, for breach of conditions of merchantable quality and fitness for purpose implied by s.71 of the Act, for damages pursuant to ss. 74B, 74F and 74G of the Act and for breach of written warranties. Serious questions of law and of fact are involved.

Pre-contract Negotiations

13. It is common ground that in October 1978 Jillawarra bought from John Shearer, through the agency of Murchison Machinery Pty. Ltd., a 40' airseeder for $14,805.

14. Paragraph 6 of the statement of claim pleads that during the course of negotiations with Murchison Machinery Mr. Bunter made known to an officer or officers of that company "expressly or by necessary implication" that the airseeder was for use by Jillawarra "in ordinary seeding operations on its wheat and grain properties in the Geraldton District of the State of Western Australia". The defence does not admit any of the allegations in that paragraph but it is apparent from the evidence of Mr. Bunter and of Mr. Hosken, Murchison Machinery's manager, that the allegations in para. 6 were made out. Indeed, given the location of Jillawarra's farming activities, as known to Mr. Hosken, and the nature of the machinery, the allegations are self evident.

15. However paras 7 and 8 of the statement of claim plead that during the course of negotiations Jillawarra was supplied with a printed brochure describing the John Shearer airseeder and containing a fairly detailed description of its sowing rates and other attributes. The brochure was also said to refer to and describe a monitor, an instrument sited in the tractor cab to indicate the speed of fan rotation and the operation of other components of the airseeder.

16. That such a brochure exists is not in issue; one was produced at the hearing. But what is in issue is whether one was shown to Mr. Bunter at the time he was negotiating the purchase of the airseeder and whether one existed in October 1978. The matter is of importance because Jillawarra relies upon statements in the brochure as constituting representations upon which it relied in agreeing to buy the airseeder. And, although not expressly pleaded, it argues that those statements amounted to misleading or deceptive conduct.

17. In his opening address, counsel for the applicant produced a document, subject to proof, as the brochure referred to in para. 7 of the statement of claim. Mr. Hosken, who was called by the applicant, was shown the brochure and agreed that he had given a copy of that document to Mr. Bunter. It was then admitted in evidence as exhibit 1.

18. When Mr. Bunter began his evidence he was shown a brochure which was identical to exhibit 1 save as to a reference to the number of splines on the drive and as to the identity of particular farmers who contributed testimonials. That brochure was admitted in evidence as exhibit 14. It emerged that Mr. Bunter obtained that document some time in 1980 from another John Shearer dealer, McIntosh and Son, and that he did so in connection with a claim he intended making against John Shearer. Counsels' submissions suggest that exhibit 1 was the document obtained from McIntosh and Son but an examination of the two brochures points to exhibit 14. That document contains comments in Mr. Bunter's handwriting and is endorsed "McIntosh and Son". Nothing turns on whether the document obtained by Mr. Bunter in 1980 was exhibit 1 or exhibit 14.

19. In his closing address counsel for John Shearer accused Mr. Bunter of duplicity in not disclosing at the outset the source of the brochure. I do not think that Mr. Bunter was trying to mislead the court though the use of the two brochures tended to confuse.

20. A consideration of the evidence does not warrant a conclusion that Mr. Bunter was trying to suggest that the brochure came from Murchison Machinery. Indeed, notwithstanding Mr. Hosken's acknowledgement that he gave a brochure to Mr. Bunter, the latter was adamant that he was not given one at the time of purchase. From the entirety of Mr. Bunter's evidence (and some of his answers were hard to reconcile with others) I am not satisfied that he was even shown such a brochure though he may have been shown or had read by Mr. Hosken portions of some "promotional literature", to use the witness' words.

21. The applicant has failed to establish that it was "supplied with a written brochure". I reject the applicant's case so far as it relies upon statements in the brochure as contributing misleading or deceptive conduct or as representations, warranties or terms of purchase.

22. I have no doubt that Mr. Hosken told Mr. Bunter various things about the John Shearer airseeder but the only specific statement that Mr. Bunter was able to recall was that "the machine had a conveying ability of 3 tonnes per hour of seed and super".

The Contract

23. The contract between the applicant and the respondent is constituted by two documents. One emanates from Murchison Machinery and is an invoice dated 18 October 1978. Apart from one matter to which I shall refer later, that document is concerned with price and the terms of payment.

24. The other document emanates from John Shearer and is a customer through dealer order form. It is addressed to John Shearer and is signed by the customer, in this case Mr. Bunter, and is in the form of a request to John Shearer to supply a 40' airseeder on certain terms and conditions. Jillawarra relies upon clause 2(j) of these terms and conditions whereby John Shearer warrants to the customer:

"... that in normal use if any part of

Goods manufactured by Company is proved
to be of defective material such part
will be replaced by Company if returned
to Dealer at cost of Customer within 12
months of delivery of Goods (90 days in
the case of 'Liteline' range) but such
warranty shall cease to apply forthwith
if Goods are misused or used contrary to
recommendations of Company and/or dealer
or if any unauthorised alterations,
modifications or substitution of any
part of goods is made or there is any
breach by Customer of these terms and
conditions".

25. Paragraph 3 of the terms and conditions is in the form of an acknowledgement by the customer that "no warrant assurance or representation" has been made otherwise than contained in the document and that the customer has relied entirely on his own knowledge and judgment. The document purports to exclude all other terms, warranties and conditions. Such an exclusion is contrary to s.68 of the Trade Practices Act and the respondent does not rely upon this paragraph to limit its liability in any way. I need say no more about that part of the document.

26. Both invoice and customer through dealer order form follow the reference to a 40' airseeder with the notation "1000 PTO". The invoice contains a reference to "2470 Case" and the customer through dealer order form a reference to "Tractor 2470 Case".

27. The Case 2470 is a tractor equipped with power take-off. I am satisfied that when Mr. Bunter signed the forms in October 1978 he was interested in buying a Case tractor and that he had in contemplation that the airseeder would be operated by the 1000 rpm take-off with which that tractor was equipped. Although there was some uncertainty as to the precise time at which the reference to the Case tractor and to the 1000 PTO was included on the invoice, I am satisfied that the customer through dealer order form contained these descriptions when it was signed by Mr. Bunter.

28. In the event Mr. Bunter did not buy a Case tractor; he bought a Steiger tractor which was not equipped with a power take-off, hence the need for a hydraulic motor or hydromotor to operate the airseeder. But I do not accept Mr. Bunter's statement that within two weeks of buying the airseeder he told Mr. Hosken he had bought a second-hand Steiger and that he intended to drive the airseeder with a hydromotor. That evidence is inconsistent with the known fact that Mr. Bunter did not buy the Steiger tractor until December 1978.

Delivery of the Airseeder

29. The airseeder was delivered to Mr. Bunter in April 1979 at which time he was some two weeks late in beginning seeding on his Mingenew farm. It will be necessary to deal at some length with the operations of the airseeder both at the Mingenew property which Jillawarra was farming in 1979 and the Chapman Valley property which it bought in 1980. But first it is appropriate to refer to a letter written by Mr. Bunter to John Shearer on 6 July 1979. That letter set out various complaints Mr. Bunter had with the airseeder and in the course of it he wrote:

"Due to the late delivery and the urgency
of the season, to obtain the required
fan revolutions, I was forced to equip
it with hydraulic drive rather than wait
for the modifications to be done by
yourselves".

30. The letter identified the cost of this work as $2,019.08, a cost which was part of the damages claimed in the statement of claim though it was modified during the hearing to $1019.08.

31. It was a curious statement to make. Mr. Bunter was not forced to equip the airseeder with hydraulic drive by reason of any action or lack of action on the part of John Shearer. Once he bought the Steiger tractor in December 1978 it was known to him that there was no power take-off and so some other form of motor power was required. Before the airseeder was delivered, Mr. Bunter had approached Mr. Himbeck, who carried on the business of sales and service of hydraulic equipment, to fit a hydraulic motor to drive the airseeder.

32. The assertion was repeated in the applicant's answers to interrogatories, in the course of which Mr. Bunter swore that the airseeder delivered was geared to 1000 rpm and not 540 rpm as ordered and that it was equipped with a 540-6 spline shaft. The particular answer continued:

"Because of this condition, late delivery
and the urgency of the season in order
to obtain the required fan revolutions
the Plaintiff was forced to equip the
machine with hydraulic drive at the
expense of $2,019.08."

33. In cross-examination Mr. Bunter agreed that he was not forced to equip the airseeder with a hydraulic drive but that this was his own decision. He sought to explain his answers by saying that the reference to "hydraulic drive" should probably be to "hydraulic pump". However I do not find this explanation convincing. Although he was the applicant's principal witness, Mr. Bunter did not give evidence until after 4 other witnesses had testified. It was not until the third day of the hearing that he began his evidence. Certainly until he was cross-examined the picture that had been presented on behalf of the applicant, both in opening and evidence, was that the decision to equip the airseeder with a hydraulic drive or hydromotor was one forced upon the applicant. This was simply not so and the matter cast a cloud over the applicant's case.

Applicant's Complaints

34. The applicant makes many complaints about the condition and operating capabilities of the airseeder delivered by John Shearer. It claims that by reasons of these many defects there was a delay in starting seeding in 1980, that a number of areas were not seeded effectively and that the crop suffered from uneven distribution of fertilizer and the fact that recommended fertilizer rates were not applied. There is no comparable claim for 1979, the applicant's claim for that year being largely confined to the cost of replacement of defective parts.

35. The story is a long and complicated one and I think the best way of dealing with it is to set out, chronologically, the applicant's history of complaints. I do so initially without comment and shall then make an assessment of those complaints in the light of the cross-examination of the applicant's witnesses and of the evidence called on behalf of the respondent.

36. The story falls fairly neatly into two farming years and I shall deal with it accordingly.

The Year 1979

37. The invoice from Murchison Machinery specified delivery of the airseeder in February 1979. It did not arrive until late April. Mr. Bunter had earlier told Mr. Hosken that he did not require a 1000 rpm power take-off fitting but that he did want a 540 rpm fitting as he had purchased a Steiger tractor. When the airseeder arrived Mr. Himbeck supplied and fitted a hydromotor designed to drive the machine at 540 rpm. When the machine was taken to Mingenew and connected to the Steiger tractor it was found that the fan speed was operating too low. The result was that insufficient air was being driven into the machine to move grain and fertilizer.

38. Mr. Bunter discovered that the gearing on the pulley system to the fan drive was incorrect and appeared to have been designed in anticipation of 1000 rpm drive. The airseeder was equipped with a six spline shaft. Mr. Bunter phoned Mr. Hosken who said that the machine had been delivered with the wrong gearing and that he would attempt to get the correct V belt pulleys and drives. There was likely to be a delay so, on Mr. Himbeck's advice, a larger hydromotor was substituted to provide 1000 rpm. However there was then trouble with the tractor, it being found that the hydraulic pump was not big enough to drive the hydromotor at the extra revolutions. Again on Himbeck's advice, Mr. Bunter fitted a larger pump to the Steiger tractor. It was a Sperry Vickers pump, comprising a small pump to drive the steering on the tractor and a large pump to deliver 35 gallons of oil a minute through the hydraulic system. The pump gave 25% to 30% excess capacity to drive the hydromotor and there were no problems with the adequacy of the power from that pump to operate the airseeder.

39. When the airseeder was operated Mr. Bunter found that the machine was spreading too much material. The material in question was urea, which it was Mr. Bunter's practice to spread 24 hours before seeding. He telephoned John Shearer's office in Adelaide and spoke to Mr. Kotzakis. On Kotzakis' instructions he carried out various investigations and discovered that a wrong drive cog had been fitted to the machine. John Shearer delivered the correct cog from Adelaide within 24 hours and thereafter a seeding rate close to what was desired was achieved.

40. But almost immediately the primary hoses became blocked. Blockages occurred every half an hour or so and sometimes the airseeder could not go 100 yards without having to be stopped. Blockages occurred in various hoses; the machine had to be stopped frequently to clear them. If a blockage was not discovered quickly enough, the material for distribution (urea, seed or super) overflowed the distributor cup below the bins and was lost on the ground.

41. Mr. Bunter contacted Mr. Hosken and one of John Shearer's representatives, Mr. Sparks, went out to the farm. He was not able to discern the cause of the blockages.

42. Mr. Bunter also complained of other mechanical problems with the airseeder including noisy fan bearings, a broken axle, air leaks in the box section with bulging and flexing of the welded struts, the dislocation of rubber caps on the subdivider heads, loose bolts on the box section of the airseeder and stress factors on the welding. There was a failure of the bearings on the fan, causing the fan to disintegrate.

43. As well as blockages in the hoses, there were frequent blockages in the metal elbows of the distribution system. The elbows link the primary hoses to the sub-divider heads. However those blockages were not as frequent as the ones in the hoses.

44. As a result of these problems, Mr. Bunter was still seeding during the third week in June 1979. Sections of land were missed and the supply of nitrogen to the soil was irregular. There was substantial wear in the hoses and it became necessary to obtain extra hose lengths from Mr. Hosken. About three-quarters of the way through the 1979 seeding programme the fan blew up. Mr. Bunter and his employees had to rectify a number of these problems including welding parts of the machine.

45. A further complaint made by Mr. Bunter was that the electronic monitor was not functioning. The essential purpose of the monitor is to alert the operator to any malfunction occurring in the drive mechanism of the airseeder. There was no system on the monitor that would indicate to the operator the existence of blockages in the distribution system. There was a system on the monitor to warn the operator if the fan speed revolutions dropped below a designated level, but this was not working.

46. The electronic monitor was not complete and did not work either during the 1979 or 1980 season. Mr. Bunter complained to John Shearer and attempts were made on behalf of that company to repair the monitor, though without success.

47. In the second half of 1979 John Shearer commissioned a re-work programme in Western Australia. This involved a team moving around the country attending to any mechanical problems experienced by the owners of John Shearer airseeders. As part of this re-work programme John Shearer took delivery of Mr. Bunter's airseeder and worked on it. One of Jillawarra's employees picked up the airseeder in May 1980.

The Year 1980

48. Before the commencement of the 1980 seeding season Jillawarra sold the property at Mingenew and bought one in the Chapman Valley north of Geraldton.

49. The best time for seeding in the Chapman Valley area is in the third or fourth week of May. It is light country and the method of seeding proposed by Mr. Bunter was an initial working back at the start of the season, a second working back to kill weeds and a third operation to seed. He intended to seed some 2600 acres in 1980, anticipating that this should be done within a fortnight.

50. Seeding began in the third week of May 1980. Two paddocks were ploughed before the season broke. The crop was sprayed after seeding. Urea was applied.

51. After 600 to 800 acres had been seeded the fan again disintegrated. There were problems with the bearings on the distributor shafts and they had to be replaced. Blockages of the primary distributor hoses continued, at irregular intervals. The cleaning out of hoses and of the distributor box following a blockage left heaps of discarded and wasted seed and super around the paddocks.

52. Mr. Brown of McIntosh and Son, which had become the John Shearer distributor in Geraldton, tested the machine but was unable to determine the cause of the blockages. Later another serviceman from that company, Mr. Bagley, checked the machine and found that there were sufficient revolutions on the fan and sufficient oil in the hydraulic system.

53. As a result of these and other problems, the completion of seeding was delayed until the end of June, a month longer than had been anticipated. There was uneven distribution over the full width of the machine and inadequate super distribution.

54. Eventually Mr. Bunter decided to remove the metal elbows and replace them with rubber inner tube; there were no further blockages in the elbows.

55. The overall experience in 1980 was one of a range of mechanical problems though these were relatively minor. The main problem was blockages and wear in the distribution hoses.

56. Mr. Bunter then decided upon a further modification. He replaced the primary hoses with polythene piping. The result was less friction in the interior of the hoses, fewer bends and a freer flow of air. When these modifications had been completed a further 600 acres were seeded, with the machine operating at a vastly improved rate.

57. Jillawarra complains that as a result of the problems encountered with the airseeder, not only was seeding delayed but substantial areas were missed and the result was a considerably lower yield than had been expected. For this the applicant claims damages.

An Assessment of the Applicant's Evidence

58. In presenting this picture, the applicant relied upon the evidence of Mr. Bunter, of his workmen at Mingenew and Chapman Valley and on those representatives from Murchison Machinery and McIntosh and Son to whom he complained and who visited the farms. These witnesses were subject to extensive cross-examination and the respondent countered with the evidence of several witnesses, in particular that of Mr. Thomas its research and development manager.

59. As a general observation I am satisfied that, although there may have been an element of exaggeration in the evidence of Mr. Bunter and some of his employees, the airseeder did not operate efficiently in 1979 or 1980. I am further satisfied that the problems to which I have referred interfered with Jillawarra's seeding programme. But it is necessary to look more closely at the evidence in the light of the cross examination and of the testimony of a technical nature, in order to determine why this happened.

60. Although Mr. Bunter is a farmer with considerable practical experience, this was the first airseeder he had used. Nor had his employees any previous experience with such machines. I accept the respondent's thesis that much of the applicant's complaints arises from a misunderstanding about some mechanical aspects of the airseeder, particularly when powered by a hydromotor. Indeed the respondent goes further and accuses Mr. Bunter of deliberately presenting a false picture in certain aspects of his evidence. I shall deal with that aspect later in these reasons.

61. Very much at the forefront of the applicant's complaints (and the first particular of unmerchantable quality pleaded in the statement of claim) is a contention that "the Airseeder when delivered was equipped as a 1000 rpm machine and not as a 540 rpm machine".

The Relevance of 1000 rpm or 540 rpm

62. For reasons already given I am satisfied that in October 1978 Jillawarra ordered from John Shearer an airseeder intended to be driven by a 1000 rpm power take-off on a tractor. When Mr. Bunter made the decision to buy a Steiger tractor he found himself with a machine without a power take-off and he had therefore to instal a hydromotor. The decision to instal a hydromotor was his own decision and one brought about by his choice of a tractor.

63. But the fact that the allegation was made shows that the applicant was labouring under a misunderstanding, to put it at its lowest. The question of 1000 rpm or 540 rpm was relevant when the airseeder was to be powered by a power take-off on a tractor. But it was not determinative when the machine was to be driven by a hydromotor.

64. When he was approached by Mr. Bunter at the end of 1978, Mr. Himbeck had been in the business of Himbeck Hydraulics for about a year. He had not seen an airseeder before and so made inquiries to assess how best to fit an hydromotor to the John Shearer airseeder which was then in the yard of Murchison Machinery. He decided on a Sperry Vickers pump. The pulley gearing on the fan drive was 100 rpm at the shaft so that a ratio of 5:1 to the fan would produce a fan speed of 5000 revs which Mr. Himbeck understood to be desirable. He proceeded to design the installation accordingly.

65. I accept the respondent's submission which is put in these terms:

"The fan drive fitting at 1,000 r.p.m.
rather than 540 r.p.m. played no part in
the decisions Himbeck made to increase
the hydraulic capacity of the hydro
motor first fitted by him or of the
tractor hydraulic pump which was on the
tractor when purchased by Bunter. The
reason for those changes was Himbeck's
belief that the original tractor pump
was inefficient resulting in the
hydromotor not generating sufficient
power to produce 1,000 revs".

66. The hydromotor was adequate to produce 1000 rpm on the input shaft connecting the fan. The reason why Himbeck substituted a larger capacity hydromotor was to cope with the larger capacity pump he had decided to instal on the Steiger tractor. Mr. Bunter compounded the confusion when he said that the fan speed obtained at the farm after hooking up the hydraulic installation to the Steiger tractor was only 2500 rpm because the airseeder was set up for 1000 rpm pto instead of 540 rpm pto. I am satisfied that Mr. Himbeck knew the airseeder was geared to 1000 rpm when he inspected it at Mr. Hosken's yard; accordingly he ordered and fitted a hydromotor to generate 1000 rpm.

67. Mr. Bunter must be taken to have believed that the Steiger tractor had adequate hydraulic capacity to meet his requirements. If he lacked that belief, it was incumbent on him to ensure that he had a tractor with that capacity.

68. As Mr. Thomas pointed out, the critical configuration for the power take-off rating is the spline configuration on the upward shaft on the tractor, not the input shaft on the farm implement. The power rating or gearing of the input shaft to the farm implement is not controlled by the spline configuration but by the mechanical gearing of the implement itself. This may be direct or it may be indirect from the motive power driving the implement as was the case here. Hence Mr. Bunter's complaint that the input shaft to the fan was a six spline shaft is simply not to the point.

69. Mr. Himbeck decided to increase the hydraulic capacity of the hydromotor he installed and he decided to fit a bigger pump than was on the Steiger tractor when Jillawarra bought it. But he made those decisions because of his belief that the original tractor pump did not permit the hydromotor to generate enough power to produce 1000 rpm. And once he decided on a larger pump a larger capacity hydromotor was necessary.

Some Items of Damages Claimed

70. The conclusions just reached make it possible to deal now with some items in the applicant's claim for damages. They are distinguished from what is described in the statement of claim as "Consequential Damage 1980 Season" and are as follows:

"(a) Conversion of power take
off mechanism to hydraulic
drive $2,019.08

(b) Replacement of defective
parts 17th July, 1979 339.80

(c) Replacement of defective
parts and incidental labour
19th July, 1979 498.61

(d) Replacement of defective
parts and incidental labour
10th October, 1979 125.00
--------
Sub Total $2,982.49"

71. As mentioned earlier the claim for $2019.08 was reduced to $1019.08. The conversion of power take-off to hydraulic drive was the applicant's own decision and cannot be charged to the respondent. The reduced claim is in respect of the larger pump; but the respondent cannot be held responsible for that cost which was simply a consequence of the inadequate pump initially installed by Mr. Himbeck.

72. Items (b), (c) and (d) were deleted by counsel for the applicant in the course of his opening address. But their inclusion throws some light on Mr. Bunter's general attitude to this litigation. Undoubtedly he experienced much frustration during the seeding operations of 1979 and 1980 though the reasons for this must still be explored. But the frustration coloured his thinking so that claims were made that had no basis.

73. Items (b) and (c) were simply warranty items the cost of which was borne by the respondent. Item (d) was in truth not for the replacement of defective parts. It was for the supply of a roller drawbar which was an optional extra selected by Jillawarra.

74. The applicant has deleted items (b), (c) and (d) and fails in respect of item (a).

75. Drive Gears

76. I now turn to other aspects of the complaints made by Jillawarra against John Shearer.

77. The applicant further complains that the airseeder "was equipped with incorrect drive gears". Again this is the product of its own misunderstanding. The machine was calibrated correctly; in other words it was correctly geared for the 40' airseeder purchased by Jillawarra. The reference to 40' is a reference to the length of the cultivator bar. However Mr. Bunter then decided that he wished to fit a Connor Shea cultivator bar to the airseeder. This cultivator bar is 32' or 33'; both widths were referred to in evidence.

78. Although Mr. Bunter bought the Connor Shea cultivator bar from Murchison Machinery, Mr. Hosken was not in that respect acting as the respondent's agent. I agree with the respondent that it was the applicant's responsibility to make whatever changes were necessary to the airseeder or to the cultivator bar for the two to work together.

79. A consequence of the smaller cultivator bar was that it would only take 8 heads of 8 secondary or distributor hoses each, in lieu of the 10 heads of 10 distributor hoses each which is standard for a 40' bar. It was for Jillawarra to check and adapt the drive sprocket which determines the calibration for seed and super delivery rates through the airseeder hopper and cultivator bar.

80. At the time of purchase Mr. Bunter received from Mr. Hosken a sowing rate chart which set out the gearing requirements for the sowing width of a John Shearer airseeder fitted to a 33' cultivator bar. The chart, which was tendered in evidence, is part of the John Shearer airseeder parts and instructions manual. The manual itself was not available at the time. The chart, referred to as grain and fertilizer chart No. 45H, prescribes gear box settings for various cereal crops at the rate of so many kilograms a hectare and also prescribes the gear box setting for urea at various kilograms a hectare. The chart is expressed to apply to any airseeder provided:

"a) it is fitted with the primary drive
sprocket specified for the sowing
width of implement in use (refer to
Chart 46H) and,

b) ten primary hoses and subdividing
heads are used with that
implement".

81. There follows a formula whereby the appropriate gear setting may be calculated where other than 10 primary hoses/subdividers are used.

82. Thus Mr. Bunter was, or should have been, alerted to the appropriate gear setting when he decided to use the narrower Connor Shea bar. And, when he telephoned Mr. Kotzakis as mentioned earlier in these reasons, he was supplied with a 24 tooth primary drive sprocket, being that shown on chart 46H as appropriate for a 33' cultivator bar.

83. There are other mechanical aspects relating to the airseeder which have an important bearing on the applicant's case. But it is convenient to pick up those matters in the course of dealing with the allegations of unmerchantable quality in the order in which they appear in the statement of claim.

The Monitor

84. It is next alleged that "the electronic monitor was not functioning correctly in that not all the bin and shaft sensors were operative and the monitor itself was also defective".

85. The term "monitor" was not always used with precision during the evidence. The instrument has two sections, a harness and sensors which are on the airseeder hopper (or bins) and a console located in the cab of the tractor.

86. As a matter of pleading the complaints regarding the monitor are confined to the bin and shaft sensors; no allegation is made about the fan speed monitor. However, in the course of evidence, Mr. Bunter complained that the fan speed monitor did not work from time to time.

87. The bin and shaft sensors were replaced in 1979. It was not suggested that their condition affected the operation of the airseeder.

88. Although the fan speed monitor did not work at times, I am not persuaded that this had any effect on the efficient operation of the airseeder. None is pleaded and none of the drivers complained that any breakdown in the fan speed monitor interfered with their work. One of the employees, Mr. Johnson, did not know the fan speed and another, Mr. Clarke, was never told the speed at which to operate. Mr. Himbeck gave evidence that he told Mr. Bunter the only sure way to check the fan speed was with a tachometer but Mr. Bunter never tested the fan after Mr. Himbeck's visit. To monitor fan speed, the monitor had to be pre-set on a speed range. I agree with the respondent that this could hardly have been done in the light of the unawareness of Mr. Bunter and his employees of the correct speed.

89. For a period of 8 months in 1979-1980 the airseeder was in McIntosh and Son's yard. During that time Mr. Bunter did nothing about the condition of the monitor. The applicant's letter to the respondent of 6 July 1979 (the letter of complaint) and the evidence generally do not support the argument made in the course of final addresses that malfunctioning of the console was thought by the applicant to be or was in fact a cause of the problems. I shall return to this matter later in these reasons.

A Group of Complaints

90. A number of complaints may be grouped together. They are as follows:

"(d) the lip of the distributor heads
over which the inspection caps fit
fell off resulting in the caps
being blown off and lost.

(e) the fan bearings failed twice
resulting in the disintegration of
the impeller which ruined the shaft
and substantially damaged the
housing.

(f) all of the welds on the struts
inside the box section failed
resulting in its collapse.

(g) the box section at the front of the
Airseeder was not sufficiently
attached to the frame - only four
(4) 7/8" bolts in 1" holes - and is
impossible to maintain in a tightly
fixed position".

91. Except in so far as the fan is concerned, these complaints do not feature in the 1980 season. In the respondent's submission, these fan failures had the same cause as the fan failure in 1980, namely excessive fan speed and incompetent hydraulics. I shall look at these matters when dealing with the complaint that the airseeder was unable to deliver the recommended rate of fertilizer. It would seem from the evidence of Mr. Clarke that the fan blew up when the hydraulics ceased to work.

Wear Problems with the Air Hoses

92. A more serious allegation is that "there exists continuous wear problems with the air hoses through which the seed and fertilizer are carried".

93. In 1978 when Jillawarra bought the John Shearer airseeder, the air hoses on that machine carried a 3 cm inner lining. The applicant's evidence is of continual blockages of air hoses, particularly in 1979. It should be noted however that no claim for consequential loss is made in respect of 1979.

94. The respondent does not deny that wear did occur with the inner linings in 1979. Nor does it dispute that the linings had a tendency to separate from the outer hose. It does deny that wear occurred to the extent and with the frequency alleged by the applicant. It contends that some wear was to be expected with items such as air hoses which are essentially consumable items. It also contends that most if not all of the wear problems encountered with the air hoses were due to the excessive fan speed at which the applicant operated the airseeder.

95. A further cloud was cast over the applicant's case by reason of another incident which misled the court. In opening the applicant's case, counsel referred to a section of primary distribution hose to be tendered in evidence. It was in fact tendered through Mr. Hosken as a sample of hose with the kind of wear experienced to the inner lining. The hose was put to Mr. Bunter in the course of his evidence and he spoke of the "collapse of that inner rubber lining" in describing the wear discovered when the hose was blocking continuously.

96. I agree with counsel for the respondent that the assumption upon which the piece of hose was tendered and received by the court was that it came off Jillawarra's airseeder in that condition during 1979. As a result of cross-examination, it emerged that the piece of hose came from a neighbouring farmer's machine. Mr. Bunter then claimed that wear "very identical" to that on the exhibit occurred on his machine within a day or two of starting seeding. It was pointed out to him that the piece of hose exhibited was completely worn through and in that condition signs of escaping super would be observed. Mr. Bunter then admitted that most times the hoses did not physically wear through to the degree shown by the exhibit.

97. I am not persuaded that the applicant intentionally sought to mislead the court by tendering the piece of hose, though I have misgivings about the matter. The exhibit did create a false picture of the problems experienced by the applicant. I should add that counsel was acting in good faith in tendering the exhibit.

98. It does not follow that I reject the evidence of Mr. Bunter and his employees that there were wear problems with the air hoses in 1979. The trouble was described by Mr. Hosken in these words:

"The tube is round and when that started
to wear it would come down that like a
clacker valve and close the air flow
off".

99. In machines sold by John Shearer for the 1980 season, thicker lined hoses were used though there was no evidence that Mr. Bunter was using them on his machine. Mr. Bunter said very little about blockages due to wear in 1980 and the evidence of his employees did not suggest that this was a particular problem in that year.

100. I find it very difficult to make any assessment of the extent (if any) to which the applicant's operations were interrupted by reason of excessive wear in the distributor hoses. The problem is alleviated because in 1979, for which there was more evidence of wear, no claim is made for consequential loss. In 1980, where consequential loss is claimed, I am satisfied that the wear on the hoses was no greater than one would expect with items which a farmer would know required frequent inspection and, if necessary, replacement.

Blockages in the Airseeder

101. In terms of consequential loss, Jillawarra's main complaints may be found in the last two items in para. 14 of the statement of claim. They read:

"(i) there exist continuous problems
with blockages in various parts of
the Airseeder causing it to deliver
the seed and fertilizer to the
ground unevenly and in places not
at all.

(j) the Airseeder is unable to deliver
to the ground the recommended rates
of fertilizer in any event".

102. These two allegations are closely related and may appropriately be dealt with together.

103. The applicant does not expressly allege that the problems it encountered with the John Shearer airseeder were due to the design of that machine. Nevertheless design faults are, I think, implicit in the applicant's case. No doubt with this in mind, the respondent called Mr. Thomas to give detailed evidence as to the design and operation of the airseeder. Mr. Thomas was the designer of the machine.

104. Mr. Thomas had extensive relevant qualifications and experience neither of which was challenged by the applicant. Nor did the applicant call any expert evidence to contradict that of Mr. Thomas. I accept his evidence regarding the design of the machine and its method of operation. I shall refer to some opinions he expressed regarding the complaints made by Mr. Bunter. It is important to have in mind that Mr. Thomas was present throughout the hearing, heard the witnesses give evidence and had access to the transcript of their testimony. His own evidence was given with objectivity and explained much that hitherto was inexplicable.

105. Before the John Shearer airseeder was put on the market, it was tested to ensure that its designed delivery capability of 3 tonnes an hour could be met. From 1978 to 1981 some 1000 airseeders were sold throughout Australia, nearly 500 in Western Australia. The respondent's machine has the largest market share of airseeders in this country and it has been successfully exported to the United States.

106. Since 1982 a large 5 tonne an hour machine has been marketed. No fundamental design changes have been made except that, since 1983, the moulded rubber elbows used on the larger machine have been used on the 3 tonne machine in lieu of metal elbows.

107. The company has received a few complaints of difficulties in the delivery of seed but, on examination, the cause was located and the problem rectified. I am satisfied that the John Shearer airseeder was adequately designed for the purpose for which it was intended.

108. In his letter of 6 July 1979 to John Shearer, in which he set out the complaints he had with the airseeder, Mr. Bunter made no mention of metal elbows. He was then complaining of the rubber hoses as a source of problems. The elbows are not mentioned in later correspondence. The statement of claim makes no express reference to them though it does refer to blockages in various parts of the airseeder.

109. There is no doubt that blockages in the elbows did occur. They were observed by Mr. Hosken though he agreed that accumulated super could be cleared with a piece of wire.

110. The respondent criticises yet again an exhibit tendered by the applicant as misleading the court. A metal elbow was produced by Mr. Bunter as having come from the 1980 season. On this occasion the respondent does not argue that the metal elbow did not come from Jillawarra's airseeder. What it does contend is that the condition of blockage was not experienced while the machine was in operation, rather from lying around in Jillawarra's shed since 1980. In cross-examination Mr. Bunter admitted that the exhibit was a misleading example, agreed that he had never had an accumulation like it in 1979 and that no accumulation was as bad as that appearing in the exhibit. The respondent does fasten onto the condition of the metal elbow tendered in evidence to argue that it is a strong pointer to a lack of regular maintenance on the part of the applicant.

111. The respondent's submission is summarized in the following passage from its written address:

"The compelling conclusion from this tale
of misleading evidence, inconsistency
and exaggeration is that no difficulty
was experienced in 1979; super was used
in 1980 in conditions conducive to
sticking to metal if care was not taken;
Bunter and his drivers failed to
competently attend to the matter by
routine maintenance and care in
operation and allowed a grossly
neglectful condition to arise, as
depicted in exhibit 15, for which the
respondent cannot be held liable".

112. There is some force in this thesis though I am not persuaded that it accounts entirely for the blockages that occurred in the metal elbows.

113. In the respondent's submission, any significant problems encountered by Mr. Bunter with the airseeder may in the end be traced to the hydraulic drive installed at his request by Mr. Himbeck.

114. The critical problem facing the use of hydraulic drive, as opposed to power take-off, is to maintain a constant fan speed. This is not a problem with power take-off because the power from the tractor is constant to the input drive on the fan.

115. An hydraulic drive depends upon engine speed and the adequacy of oil flow through the hydraulic system to the hydraulic motor in order to produce the required output to the fan drive. The power output of the hydraulic motor will vary according to usage of the hydraulic system for other purposes unless the hydraulic motor is given priority of use of the hydraulics. Hydraulic drive will vary with changes in engine speed.

116. Vernon George Anderson, a witness called by the applicant, is a farmer who has been closely involved with a group called the Kondinin and Districts Farm Improvement Group. That group consists of some 1000 farmers, machinery companies and machinery dealers. In his evidence Mr. Anderson commented that the Steiger tractor suffered from a problem in the use of hydraulic power to drive an airseeder. In his words it "had a deficiency in regard to the oil capacity to service all areas, and that was one of the particular makes which eventually had to have another pump or a priority valve put in". Mr. Anderson described how this would manifest itself in the lift of the airseeder as it went round the paddock: "... it can only lift within the priority of oil that is available to it at that time".

117. These problems can be overcome by ensuring that the hydromotor does not vary in its speed, but this requires the fitting of an extra pump and also of a priority valve. Mr. Bunter did not have a priority valve installed and, in the respondent's submission which I accept, his system suffered from the important deficiency that the hydromotor fitted by him had no priority over the oil supply to the hydraulics. In the result the fan could not be maintained at a constant speed.

118. I accept the evidence of Mr. Thomas that Mr. Bunter's installation had no priority valve for the hydromotor. A great deal of evidence was given concerning a valve fitted by Mr. Himbeck but I am satisfied that this was a flow control valve, not a priority valve, and that its function was not to give priority of oil supply. In fact the installation of a flow control valve "in parallel", together with the fitting of a larger tractor pump and larger capacity hydromotor, in some ways aggravated the situation by creating additional heat problems within the hydraulic circuit. The respondent invited me to draw the following conclusions from Mr. Thomas' evidence, in particular his supplementary report. In my view the conclusion are warranted.

(a) Variation in engine speed, however
caused, will result in a
proportionate variation in fan
speed.

(b) High oil temperature in the
hydraulic system will result in
reduction of fan speed.

(c) The use of remote implements
hydraulics, for instance raising and
lowering the cultivator bar, will
rob the hydromotor of hydraulic
power and cause the fan speed to
falter.

(d) The tractor power available to the
hydraulic circuit is marginal for
the tractor implement load.

119. I am satisfied that Mr. Bunter failed to appreciate that what he thought to be a priority valve was no more than a flow control valve. Thus it did not occur to him, as apparently it did not occur to Mr. Himbeck, that the problems being encountered with delivery of seed and fertilizer might be due to the absence of a regular fan speed which in turn was due to the lack of a priority valve.

120. In 1979, as appeared from the evidence of Mr. Clarke, the fan blew up in a creek, an occurrence which Mr. Thomas said was inevitable with Mr. Bunter's hydraulic set up and the fan speeds at which he operated. Mr. Bunter believed it did not matter what engine revolutions or tractor speed he operated at, even up to its maximum 3000 revs. He believed the flow control valve operated as a governor on the fan speed at 6000 revs. In these beliefs he was wrong. He ran the tractor engine and hence its fan speed too fast, thus putting the fan bearings under stress and rendering them likely to fail. This they did.

121. Conversely, dropping the tractor engine speed results in falling fan speed and may cause blockages in the distribution system because the fan is not driving a sufficient volume of air to carry the desired sowing rate of seed and super. Mr. Bunter believed he could operate at engine speeds down to 1200 to 1300 rpm and so instructed his drivers. But again in that belief he was wrong.

122. I am satisfied that what I have just described largely accounts for the problems encountered by Mr. Bunter in 1979.

123. In 1980 Mr. Bunter began seeding with a new fan which blew up at the commencement of seeding. I am satisfied that this was because the fan was being operated at 6000 revs which was excessive.

124. Mr. Bunter and his workmen Messrs. Taylor, Clarke and Johnson were all quite inexperienced in the use of airseeders. The workmen took their lead from Mr. Bunter who thought that he could run the machine constantly at fan speeds up to 6000 rpm or engine speeds down to 1200 to 1300 rpm, and that he could operate the Steiger tractor at 2750 psi when the manufacturer's warning stipulated that 2000 psi should not be exceeded. He failed to set up the airseeder for use with 8 primary hoses in accordance with the John Shearer manual. There is no reason to think that Jillawarra's employees were other than competent when doing the sort of work to which they were accustomed. But this was not work to which they were accustomed and it did not occur to them that the instructions being given by Mr. Bunter were likely to bring about difficulties with the machine.

125. I accept the respondent's submission that blockages appearing in 1979 and 1980 and difficulties experienced in achieving the desired delivery rate of seed and fertilizer were substantially due to the hydraulic drive fitted by the applicant to the airseeder and the inappropriate directions given by Mr. Bunter for its use.

Kondinin and Districts Farm Improvement Group

126. In reaching this conclusion I do not overlook the evidence of Mr. Anderson to whom some reference has already been made.

127. The Kondinin and Districts Farm Improvement Group conducts surveys and investigations of farm equipment and farming operations. Its method is to prepare a comprehensive questionnaire, mail the document to members likely to be concerned and follow up with a personal visit to certain farmers, selected on a random basis. In 1979 the Group carried out a seeder reliability survey and in 1981 a seeder and cultivator reliability survey. The results of both surveys were published in book form and these were tendered in evidence. The John Shearer airseeder bought by the applicant was not part of either survey.

128. Although no objection was taken by the respondent to the admission of the surveys, as opposed to follow up conversations Mr. Anderson had with particular farmers, there is a question as to the evidentiary value of the documents. The 1979 and 1981 surveys include 26 and 20 John Shearer airseeders respectively. As Mr. Thomas pointed out:

"The surveys are simply a collection of
the answers to the various questions
that the group has chosen to ask. They
do not make an analysis of the answers.
... a comment that an individual farmer
may make is printed with the same weight
as a comment that every farmer makes; so
it needs to be viewed in that light".

129. Nevertheless, Mr. Thomas saw the surveys as useful from the point of view of the manufacturer. Without referring to the questionnaire in any detail, it may be said that although some problems were mentioned the John Shearer airseeder rated well among those farmers who were part of the surveys. Certainly the surveys did not establish that that airseeder was incapable of delivering seed and fertilizer at the specified rate of 3 tonnes an hour.

130. Mr. Anderson spoke of blockage problems that sometimes occurred in the John Shearer airseeder, particularly where there was wear in the primary hoses. He agreed that the efficient operation of an airseeder depended on the efficient delivery of air from the fan and that some operators had experienced problems in getting sufficient hydraulic power, depending on how their hydraulic systems were connected.

131. Mr. Anderson's evidence was given in a thoughtful and considered way but on technical matters it cannot stand against the expert testimony of Mr. Thomas, where there is any inconsistency between the two. Furthermore, it is apparent from Mr. Anderson's evidence that he assumed the necessity to use a priority valve with hydraulic motive power. And, as I have found, the applicant did not instal such a valve on the machine the subject of this application.

132. Against the background of the various findings made and conclusions reached in these reasons, it is appropriate to consider the various causes of action upon which the applicant relies. Before doing so it is appropriate to say something further about the monitor in the light of my conclusions about the hydraulic system.

The Monitor - a Further Reference

133. Earlier in these reasons I held that malfunctioning of the console of the monitor was not thought by the applicant to be a cause of its problems and that in fact it was not a cause.

134. In the course of his final address, counsel for Jillawarra submitted that if Mr. Thomas was right in his opinion that the hydraulics were producing fluctuations in fan speed, the maintenance of the fan speed monitor function of the console was "absolutely critical". The argument was that if the fan speed monitor was working, the operators would have detected fluctuations "and the matter could have been investigated and solved".

135. There are, I think, two answers to this argument. The first is that this was not the applicant's case as pleaded and presented, and no application was made to amend the statement of claim after Mr. Thomas had given evidence. The second answer is that the evidence, to which I referred when discussing the monitor, showed a singular lack of concern on the part of Mr. Bunter and his employees with fan speeds. In particular Mr. Bunter did not act on the advice of Mr. Himbeck to use a tachometer. I am not persuaded that an adequately functioning fan speed monitor would have made any difference to the applicant's operation of the airseeder.

Unmerchantable Quality

136. It is not in issue that there applied to the sale of the airseeder the implied condition in s.71(1) of the Trade Practices Act "that the goods supplied under the contract for the supply of the goods are of merchantable quality".

137. The Act does not define "merchantable quality" and one is left to a consideration of the many decisions in which the term has been considered. In George Wills & Co. Ltd. v. Davids Pty. Ltd. [1957] HCA 6; (1956-1957) 98 CLR 77 at pp 88-89 the High Court rejected the notion that proof of unfitness for a particular purpose is always evidence of unmerchantability. In their Honours' words:

"Before goods can be characterised as
unmerchantable it must be shown that, as
goods of that description or character,
they are defective though no doubt, in
many cases, proof of their unfitness for
some particular and obvious purpose may
well establish that the goods are
defective".

138. Later the court commented that the expression "merchantable quality" must constitute a reference to the condition or quality of goods and referred with approval to a passage in Benjamin On Sale 8th ed. 645 in which it is said that goods are of merchantable quality:

"... if they are of such a quality and in
such a condition that a reasonable man,
acting reasonably, would, after a full
examination, accept them under the
circumstances of the case in performance
of his offer to buy them, whether he
buys them for his own use or to sell again".

139. Later English decisions, in particular Hardwick Game Farm v. Suffolk Agricultural Poultry Producers Association [1968] UKHL 3; (1969) 2 AC 31, emphasise the concept of merchantable as commercially saleable though this may in turn introduce notions of description, purpose, condition and price.

140. I am not persuaded that the airseeder was of unmerchantable quality in the sense in which that term has been considered by the courts; indeed I am satisfied that it was of merchantable quality. As an airseeder or, if it is permissible to impose a gloss and say as an airseeder capable of carrying out the work for which it was designed, the airseeder met the test. The experience of John Shearer with similar airseeders sold throughout Australia would indicate that the machine is one that a reasonable purchaser would accept and that it has a conveying capacity of 3 tonnes an hour.

141. As I have concluded, the difficulties encountered by Jillawarra stemmed in the main from Mr. Bunter's decision to drive the airseeder with a hydromotor. I should not be taken as holding that John Shearer should not have anticipated that the airseeder might be driven by an hydraulic motor as well as by a power take-off. What I am saying is that a purchaser who decided to install a hydromotor was obliged to ensure that the hydraulic drive was appropriately designed and installed. In particular the installation of a priority valve or some other system that would ensure a constant input to the fan was essential. The applicant did not seek the respondent's advice in this respect and the latter cannot be held responsible for any vice in the airseeder that was a consequence of an inadequate hydraulic system.

142. I do not suggest that every blockage that occurred in the distribution hoses or in the metal elbows or every incident of wear in the lining of the hoses is attributable to the hydraulic system. But I am not persuaded that such problems as were encountered, which cannot be attributed to the hydraulic system, were other than the sort of maintenance problems that might be expected in the sustained running of farm machinery for an operation such as seeding. Such problems do not justify a conclusion that the airseeder was of unmerchantable quality.

Fitness for Purpose

143. I am satisfied that there applied to this transaction not only sub-s.(1) of s.71 but also sub-s.(2) of that section. It was made known to John Shearer that the airseeder being purchased by Jillawarra was acquired for seeding operations in the Geraldton district. It was an implied condition of the sale that the airseeder was "reasonably fit for that purpose". Notwithstanding the terms of the defence, counsel for the respondent did not argue in the course of his closing address that there was no implied condition of fitness for purpose.

144. Although the notion of reasonable fitness for purpose is not the same as the concept of merchantable quality, in the present case there is no significant difference. The applicant relies upon the same facts to demonstrate a failure on the part of the respondent to meet the obligations cast on it by each sub-section of s.71.

145. In my view the airseeder was reasonably fit for the purpose for which it was acquired by the applicant. It was capable of conducting seeding operations at a conveying rate of 3 tonnes per hour which was what the applicant expected. I shall not repeat the remarks just made about the significance of the use of hydraulic power by Jillawarra but I apply those remarks to conclude that as designed and operated, either by power take-off or by an adequately designed and installed hydraulic system, the airseeder was reasonably fit for the purpose for which it was acquired.

Misleading or Deceptive Conduct

146. At an earlier stage of these reasons I found that the applicant was not supplied with a copy of a brochure at the time of purchase and that, although there was some discussion between Mr. Bunter and Mr. Hosken about the attributes of the John Shearer airseeder, the only specific matter Mr. Bunter could recall was the machine's conveying capacity of 3 tonnes an hour. I rejected the claim that there was misleading or deceptive conduct on the part of the respondent.

147. Although para. 1 of the statement of claim pleads a contravention of ss. 52 and 55 of the Trade Practices Act, that conduct is not particularised in the pleading or at any rate such conduct as is pleaded is not said to have been misleading or deceptive or likely to mislead or deceive. It is hard to deny the respondent's submission that the claim under ss. 52 and 55 "is fundamentally a claim for breach of the conditions implied by s.71 of the Trade Practices Act". It is reasonable to conclude that the applicant invoked ss. 52 and 55 in order to ground the jurisdiction of the Federal Court. Had the claim for misleading and deceptive conduct been rejected but the claim of unmerchantable quality or unfitness for purpose been upheld, questions would have arisen as to the relief obtainable in this court. I refer in particular to the decisions in Zalai v. Col Crawford (Retail) Pty. Ltd. (1980) 32 ALR 187, Arturi v. Zupps Motor Pty. Ltd. [1980] FCA 164; (1980) 33 ALR 243 and Polgardy v. Australian Guarantee Corporation Ltd. [1981] FCA 26; (1981) 34 ALR 391. But those questions do not arise for consideration.

148. Although not pleaded, a case was argued in the applicant's written submission that there was misleading or deceptive conduct on the part of the respondent in failing to warn potential purchasers of its airseeders of the problems associated with the use of an hydromotor.

149. I do not accept the argument. Whether such a failure is capable of constituting misleading or deceptive conduct is debatable. But the fact is that the airseeder was able to operate efficiently with hydraulic power so long as an adequate hydraulic system was installed. The experience of farmers in the Kondinin and Districts Farm Improvement Group and the experience of John Shearer itself bear this out. It was not the responsibility of John Shearer (at any rate if it was not asked) to advise Jillawarra on such a system and there was nothing misleading or deceptive in its failure to do so. The applicant engaged Mr. Himbeck to instal an hydraulic system; unfortunately the system installed was not effective.

Sections 74B, 74F and 74G

150. The applicant also invokes ss. 74B, 74F and 74G of the Trade Practices Act, all of which lie within Division 2A - Actions against Manufacturers and Importers of Goods.

151. Each section imposes on a corporation a liability to compensate a consumer for loss or damage - in one case by reason of unsuitable goods, in another where there is a failure to provide facilities for repairs or parts, and in the third case where the goods do not comply with an express warranty.

152. The scope of Division 2A is qualified by s.74A(2) whereby a reference to goods, unless the contrary intention appears, is read "as a reference to goods of a kind ordinarily acquired for personal, domestic or household use or consumption". In the respondent's submission the airseeder bought by Jillawarra cannot fall within the description of goods acquired for personal, domestic or household use or consumption. The applicant replies with this argument:

"In the present instance it is
appropriate to consider farmers as a
class. What is used for a farmer's
personal, domestic or household use
would appear to encompass everything
which is used on or in connection with
his farm, there being no exterior
business or commerce which he conducts".

153. It is implicit in this submission that an airseeder does not constitute goods of a kind ordinarily acquired for personal or household use or consumption and that would seem to be beyond argument. It is also, I think, implicit in the applicant's submission that an airseeder would not ordinarily be described as goods acquired for domestic use. But, the argument runs, everything on a farm is domestic to a farmer unless perhaps he conducts as well some business quite foreign to farming. I do not accept the applicant's submission.

154. Division 2A was inserted in the Trade Practices Act by Act No. 206 of 1978 and came into force on 6 December 1978. No point was taken by the respondent that as the sale of the airseeder took place in October 1978, Division 2A could, in any event, have no application to the transaction. As the point was not argued, I prefer to express no view on it. And I need not do so as I am of the opinion that the airseeder was not of a kind ordinarily acquired for domestic use. In my opinion the term "domestic" carries its usual significance of pertaining to the home. I refer to only one dictum, that of Phillimore J. in Metropolitan Water Board v. Colley's Patents Ltd (1911) 2 KB 38 at p 40:

"... 'domestic' does not mean civilised
or domesticated or something
appertaining to man, but means something
to do with man as occupying or using a
house or dwelling".

155. In no sense is an airseeder within goods of a kind ordinarily acquired for use or consumption in connection with the home. The fact that a farmer's residence is ordinarily on the land where he conducts his business does not mean that the distinction ceases to exist. The relatively narrow scope of Division 2A is evidenced by the composite expression "personal, domestic or household use or consumption".

156. In any event, it would follow from the views I have expressed concerning s.71 that, in the language of s.74B, the airseeder was reasonably fit for the purpose for which it was required.

Express Warranties

157. While neither s.74F nor s.74G has any application to this transaction, it is at least arguable that the applicant's case includes claims of the sort contemplated by ss. 74F and 74G, but arising from the contract itself rather than from any obligations imposed by statute.

158. In my view any such claim must also fail. The evidence was that John Shearer maintained adequate repair and maintenance facilities and a supply of spare parts at Geraldton, Perth and Adelaide. When called upon, the respondent provided adequate service and parts within a reasonable time of any such request and certainly within the requirements of the provision pleaded in para. 10 of the statement of claim. Although the correct drive gears were supplied for the airseeder ordered by Jillawarra, another sprocket was furnished from Adelaide within 24 hours of Mr. Bunter's conversation with Mr. Kotzakis. The contractual warranty for the monitor was extended by 12 months. Work was done under the warranty in 1979, 1980 and 1981.

Conclusions

159. The applicant has failed to establish any of the causes of action upon which it relies.

160. I have considered whether I should deal with the question of damages in case the matter goes further. There was much evidence from the applicant and his witnesses and, on each side, a detailed assessment of loss made by a farm consultant. I have decided that such a course would serve no real purpose since any assessment of damages must depend to a large degree upon the view taken as to the basis of liability and the particular respects in which the airseeder was said to be defective.

161. When the hearing began the applicant applied to add to its claim interest on any award of damages which it might recover. This claim raises questions concerning the availability of s.32 of the Supreme Court Act 1932 of Western Australia to an award of damages made by the Federal Court. As I have held that the applicant fails in its claim, these questions do not fall to be answered.

162. The applicant's claim will be dismissed.