follow us on facebook
CONTACT US 13 58 28

Consumer Protection – Buying a Car: A Case Study

CONSUMER PROTECTION – BUYING A CAR - A CASE STUDY

When you purchase goods in Australia they come with guarantees and obligations in relation to quality. Consumer law protects Australians from being misled or deceived by businesses, but the common law also places obligations on the buyer to take precautions as well.

The Case

In a recent Federal Court decision, the Court was presented with a question of liability and of misrepresentation under Australian Consumer Law. The applicant (the person bringing the litigation) lives in Victoria, and purchased a thirty-year-old Rolls Royce from the respondents (those parties responding to the litigation). The applicant had not seen the vehicle prior to purchase and relied wholly on statements made by the respondents and descriptions of the vehicle on the website.

Notably the Court found that certain representations were made about the vehicle, such as:

  1. That the vehicle was roadworthy, or at the very least capable of obtaining roadworthy certification; and

  2. That the vehicle had travelled 115,000 kilometres.

Importantly, the first representation was found to have been implied by the conduct of the respondents. The respondents had heard from the applicant that he wished for the car to enable his daily commute. The respondents also made representations as to the car driving very well (because it was in a good condition). These representations were found to have been likely to, and did mislead and deceive the applicant as the correct state of the car.

Remediation

It is important to properly determine how the misrepresentations are to be dealt with.  Due to the delay in proceedings, the 30-year-old car is now 33. It has also suffered some deterioration and the resale value is potentially reduced. The court also must consider the doctrine of caveat emptor, or buyer beware.

Ultimately the Court weighed the representations made to application against the failure of the applicant to inspect or have the vehicle inspected. In doing so they awarded the applicant the sum of $10,000. This sum was determined at trial to be the cost of having the vehicle repaired so as to be roadworthy. The Court also awarded the applicant the sum of $1,500 to compensate him for the discrepancy between the kilometres advertised, and the actual kilometres done by the vehicle. The applicant had purchased the vehicle originally for $30,000.

Legal Advice

As a business owner, it is important to ensure that representations made by salespeople are correct and capable of being relied upon. However, as a purchaser of goods, it is equally important that the buyer beware, and ensure the checks and inspects are made were possible.

If you are unsure as to your obligations as either a purchaser or seller of significant goods, a solicitor from McNamara & Associates can assist you. Contact McNamara & Associates on 1300 574 974.