Dependable Motors Pty Ltd v Ashford Shire Council

High Court of Australia|1959-07-01|Before: Menzies JJ, Herron JJ, Hardie J, Ferguson J

For the reasons given I am of opinion that the appeal should be allowed, the order of the Full Court set aside and that of the trial judge's restored.

The appellant (Dependable Motors) sold the respondent (the council) a Breda 70D crawler type tractor equipped with a cable dozer blade for £6,751 14s. 0d. When it was discovered that the tractor was not suitable for road work the council brought an action for damages for, inter alia, breach of an implied warranty of reasonable fitness for the purpose of road work, arising, so it was alleged, under s. 19 (1) of the Sale of Goods Act 1923-1953 N.S.W.. The action was heard by Ferguson J. and at the trial it was admitted that it was in the course of the business of Dependable Motors to supply goods of the description of tractors so equipped and it was not contended that the sale was of a specified article under its trade name. The learned trial judge found that the tractor was not reasonably fit for road work andthat the council had made known to Dependable Motors that it required the tractor for that purpose. He found however that it had not done so in such a way as to show that it relied upon the seller's skill or judgment; accordingly he gave judgment for Dependable Motors. From this judgment the council appealed to the Full Court which by a majority (Owen and Herron JJ., Hardie J. dissenting) [1] allowed the appeal and entered judgment for the plaintiff for £4,915. It is from that judgment that Dependable Motors appeals to the Court. The only question in issue is whether the buyer made known to the seller that it required the tractor for road work so as to show that it relied upon the seller's skill and judgment sufficiently for the purposes of the section.

The evidence upon this issue was that the council required a heavy tractor for road work and the shire secretary, A. N. Heywood, communicated with one Wilkins of Inverell, who, it seems, was the local agent of Dependable Motors and from whom Heywood found out that a Breda tractor could be purchased from Dependable Motors. Wilkins provided Heywood with one of Dependable Motors' pamphlets relating to the Breda tractor and this pamphlet showed it fitted with a dozer blade. No more is known of what passed between Heywood and Wilkins nor is there any evidence of the use that was made of the pamphlet. Heywood then telephoned some members of the council including the shire president, J. R. Black, and on 12th March 1951, in accordance with the instructions given to him, he telephoned F. E. Bowman who was then in Sydney attending the Local Government Engineers' Annual Conference and asked him to "go to Dependable Motors and have a look at the tractor and see if he thought that it was suitable for the work we required." This could not have been the whole of the conversation because apart from anything else it is clear that Heywood gave Bowman the name of Albert Corney as the man to see at the premises of Dependable Motors in Parramatta Road but beyond this, what was said is matter only for speculation. Bowman was an engineer with experience of earth moving equipment who had by this time been appointed shire engineer to the council but his appointment had not become effective and he was still employed by another municipality; he did not take up duty with the council until early in April. Bowman without loss of time went to the premises of Dependable Motors and there saw Corney. Bowman's account of what took place was that he told Corney that he was there on behalf of the Ashford Shire Council which he understood was interested in a tractor that Dependable Motors had for sale and asked to see it. Corney pointed the tractor out and there was conversation in the course of which he told Corney that the tractor was required for road work with a dozer blade and a scraper scoop, and in response to his enquiry whether it would do such work Corney told him that the tractor was built to do just that sort of work. Corney's account of what happened was that Bowman introduced himself as the shire engineer from the Ashford Council and asked to see a Breda tractor 70D Model. He was shown the tractor and asked a number of questions and was given a pamphlet. This was another copy of the pamphlet that Wilkins had previously given Heywood. Corney's evidence was that he was not asked whether the tractor was suitable for road work and that he did not say that it was, although he gave evidence that he knew it was wanted for road work, that he believed it was suitable for road work and had advertised that it was. It is common ground that part of the conversation related to getting a firm called "Brown and Bunyan" to fit a blade to the tractor. Bowman stated that at the end of the conversation he said "All right, I will tell the clerk about this view and he will probably send you an order for the tractor." After this visit Bowman rang Heywood and Heywood's evidence of what Bowman said was "He told me that he had inspected the tractor. It seemed to him to have plenty of horse-power and was big enough for the work we required." Heywood then spoke to various members of the council including the president and was told to buy the tractor. On 16th March an order from the council was addressed to Dependable Motors in these terms: "1 Breda 70D Crawler Tractor equipped with cable dozer but not a P.C.U. as quoted by your Inverell agent, A.V.C. Wilkins." Dependable Motors then sent an invoice for £6,745, made up of two items as follows: - One New Breda Crawler Tractor Model 70D Serial No. 4942 £5,915 One Cable controlled Trailbuilder fitted to Tractor 830 The council paid Dependable Motors £6,751 14s. 0d. by cheque on 28th April and received a receipt dated 2nd May. The tractor equipped with the cable dozer was delivered to the council by Wilkins in about the middle of May.

It is only necessary to add that the shire president gave the following evidence: "Q. Do you remember the Shire Clerk ringing up concerning the possibility of purchasing a Breda tractor? A. Yes. Q. Did you give him certain instructions so far as Mr Bowman was concerned? A. He was to see the tractor. He came down to the Engineers' conference in Sydney and he was to look at the tractor while he was down here and to report on it - to tell us whether it was suitable or not. Q. Subsequent to that conversation with the Shire Clerk did he contact you on the telephone again - subsequent to Mr. Bowman's visit to Mr. Corney? A. I cannot remember any other subsequent conversation, except that he rang me up at one period and asked for council's - that was a later date, when I asked him to ring council and get their approval. Q. That is what I want? A. He rang me up and I instructed him to ring other councillors. We had a report from Mr Bowman, apparently, that the tractor was suitable for the work which we required it for. Q. Had the shire clerk told you that? A. Yes. I instructed him to ring the other councillors. Those councillors live from 30 to 40 miles apart. It is not possible to call a meeting at all times. We ring them up. When he rang back and said the rest of the councillors were quite in accordance with the buying of the new tractor I instructed the shire clerk to put in a formal order for the tractor. Q. Did you rely on the engineer's report? A. I had nothing else to rely on. Q. Did you rely on it? A. Yes. I did. Q. Was that the reason why you purchased the tractor? A. Yes."

In Medway Oil and Storage Co. Ltd. v. Silica Gel Corporation [1] , the judgment of the House of Lords delivered by Lord Sumner stresses that actual reliance by a buyer upon the seller's skill or judgment must be proved or inferred. Without this it could not be said that the buyer made known its reliance to the seller; it could not make known something which did not exist. In this case, Ferguson J. said: - "It seems to me that the evidence is more susceptible to the inference that there was no such reliance than that there was". The evidence which the learned judge had in mind in making this observation was not merely the evidence of the shire president quoted earlier but, more importantly, the terms of Bowman's instructions from Heywood and his report to Heywood. As to these latter matters, which I regard as of critical importance, I am ready enough to believe that the evidence is not a complete record of what occurred and I acknowledge the possibility that, in doing what he says he did at Dependable Motors, Bowman did what he was told by Heywood to do. If I could be satisfied that this was the case, I would have no difficulty in concluding both that the council relied upon Dependable Motors and that this reliance was communicated to Dependable Motors when Bowman told Corney the purpose for which the council required a tractor and asked whether the Breda would do such work, because to tell Bowman to find out from Dependable Motors whether the Breda tractor was suitable for the roadwork for which the council required a tractor would be token reliance by the council to some extent upon Dependable Motors. I have, however, come to the conclusion that the evidence does not warrant my substituting such a finding for that of the learned trial judge. Indeed, I agree with him that the evidence, as it stands, points to the inference that the council was relying upon Bowman to the exclusion of Dependable Motors. Nor do I think, having regard to the instructions that the evidence shows he received, is it possible to treat Bowman as part of the council so that his reliance can be regarded as that of the council itself. His job was to inspect and report his own opinion, and that was all.

It is then necessary to decide whether, because Bowman relied upon what Corney told him, and I have no doubt he did, and the council in turn relied upon Bowman's opinion, that, as the Full Court decided, is sufficient to bring the section into operation.

As to this, I do not think it is sufficient to bring the case within the section to show that Bowman, in making known to Corney the purpose for which the council required the tractor, did so in such a way as to show Corney that he was relying upon the skill or judgment of the vendor for the purpose of making a report and then to find second-hand reliance by the council upon Dependable Motors by saying that the council, in turn, relied upon Bowman's report. The section, as I read it and understand its exposition in Medway Oil and Storage Co. Ltd. v. Silica Gel Corporation [1] , requires that the seller should have communicated to it not merely that reliance was being placed upon its skill or judgment but that the reliance was that of the buyer, and that this communication should follow from the making known to the seller of the buyer's purpose. It is such a communicated reliance by the council that appears to me to be lacking on the evidence as it stands.

High Court of Australia Dixon C.J. McTiernan, Kitto, Taylor and Menzies JJ. Dependable Motors Pty Ltd v Ashford Shire Council [1959] HCA 25

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