Khabiya t/as Samso Wall Printing v Sachdeva & Ors

Khabiya t/as Samso Wall Printing v Sachdeva & Ors - [2019] NSWDC 431 - NSWDC 2019 case summary — Zoe

[3]

The parties

The plaintiff carries on the business of distributing wall printing machines under the trading name "Samso Wall Printing". In 2015, the plaintiff entered into business dealings with the defendants, Mr Tarun Sachdeva (the First Defendant), Seema Sachdeva trading as Opticure (the Second Defendant), who traded (in India) under the name "Opticure Solutions TIN 06111340871". Seema Sachdeva is Tarun Sachdeva's sister-in-law. The Second Defendant manufactures and sells wall printing machines in India and they are exported to other countries.
With no disrespect, it will be convenient hereafter to refer to the Plaintiff as Jeeth, the First Defendant as Tarun and the Second Defendant as Opticure.
Jeeth also brought a claim against a Third Defendant, a registered entity with the title "Opticure", but whose formal corporate name was Iscon (Vic) Pty Ltd. It was solely owned and managed by the First Defendant, Tarun Sachdeva. It was the trustee of the Sachdeva Family Trust trading as 'Opticure'. During the hearing, it emerged for the first time that Iscon had become deregistered in August 2018 (the proceeding having commenced in 2016). Deregistration has the effect that the company no longer exists: s 601AD(1) Corporations Act 2001 (Cth). After hearing from Counsel for Jeeth and for Tarun (the sole director and shareholder of Iscon), I ordered that the Third Defendant's name be struck out from the statement of claim (as finally amended).
Counsel for Tarun characterised the legal relationship between Tarun and Opticure as being one whereby Opticure appointed Tarun as its Australian agent, or, put in more grandiose terms, its 'Official Global Representative'. The scope of that agency was that Tarun would enter into contracts in relation to the sale of wall printing machines on Opticure's behalf.
By this proceeding, Jeeth seeks orders for damages for breaches of what were identified as two contracts with Opticure, and a contract of guarantee with Tarun and for contraventions of the prohibition against misleading or deceptive conduct (in the form of pre-contractual representations inducing entry into the First Contract said to be made by Opticure, Tarun and/or Iscon) in trade or commerce under sections 18 and 29 of the Australian Consumer Law. An additional claim of accessorial liability is made against Tarun in respect to the alleged contraventions of Opticure of s 18.
The pleadings were drafted in a complicated fashion: featuring multiple parties, with multiple permutations or versions of alleged contracts between Jeeth and Opticure; alleged representations by multiple parties and an allegation of accessorial liability. It assists therefore to set out, in outline, Jeeth's cases against Tarun and Opticure.

[4]

The 'First Contract'

On 26 May 2015, Jeeth and Opticure entered into a non-exclusive contract (the 'First Contract') whereby Jeeth would distribute Opticure's wall printing machines and related products within certain territories of Australia (Western Australia, Northern Territory and South Australia). This contract featured a number of alleged terms, some of which are disputed, but its essence involved Jeeth purchasing six sets of products from the Opticure for what Jeeth contends was the sum of approximately AU$46,500 (incl GST).
Jeeth signed the contract. Tarun (not Opticure) signed the contract. Counsel for Tarun accepted that Tarun signed the contract as agent for Opticure.
Jeeth says that Opticure breached the First Contract by failing to deliver two of the sets of products prior to 25 June 2015 and thereafter not refunding Jeeth's payment. Opticure contends that in relation to its obligation for delivery, the term of the contract was that it was only required to do its best to deliver the first two sets of machines before 25 June 2015. It disputed that the obligation for delivery by this date was an essential term. To the contrary, Opticure says that it was Jeeth who was in breach of the contract after defaulting on his obligation for payment.
In their separate defence, Tarun admits that Opticure did not deliver the products ordered before 25 June 2015, or refund the payment made by Jeeth, but said that the two machines were not delivered, due to Jeeth's failure to pay the outstanding balance of the purchase price, as required under the Distributorship Agreement.
Jeeth asserts, and Opticure disputes, that on 18 August 2015 Jeeth accepted Opticure's repudiation of the First Contract. Tarun denies any repudiation of the First Contract and says that Opticure understood that the Distributorship Agreement was still on foot, due to on-going communications received from, or on behalf of Jeeth.
On 23 August 2015, Mr Tony Tiernan, acting as (another) agent for Opticure, rang Jeeth to tell him that the goods (which had been ordered under the First Contract) were, in fact, ready to collect and that Jeeth would need to sign an authority. There is a question as to whether Mr Tiernan acted for anybody else. That question arises because Jeeth claims that the products were imported into Australia by Iscon.

[6]

Opticure's Defence to the Contract claims

The Second Defendant, whose (personal) name was Seema Sachdeva, did not appear at the hearing. She is an Indian resident and domicile. Although there may have been issues as to form, Ms Sachdeva not only effectively traversed the allegations raised against her; she also supplied what might best be called a counter-narrative in her Defence. She admitted that a non-exclusive distributorship agreement had been entered into on 26 May 2015. She said that two machines had been supplied to Jeeth on 17 August 2015. She said that it was a term of the contract that any defect in the machine would be reported to her within 21 days of receipt and that if any dispute arose, it would be subject to a jurisdiction outside of Australia. She says, further, that after his receipt of the two machines, Jeeth had not only used them, but had profited from their use without reporting (at least to her) any problem.
She says that since the agreement was executed at the principal place of business in Faridabad, Haryana, in India, substantive rights were governed by 'Indian law'. In particular, she relied upon a 3 year time-limitation (from the date of the invoice) under Indian law as to the right of recovery of damages; as well as a contractual warranty said to have subsisted for 15 months. She reiterated that a jurisdiction clause barred Jeeth's claim from being heard in this Court.
She added that Jeeth had obtained a remedy by filing a lawsuit against her brother-in-law (Tarun) and accordingly, this proceeding was no longer maintainable.
She also adds that Jeeth was himself in breach by failing to purchase the remaining four machines. She also contends that in breach of the agreement, Jeeth used his own 'Samso' branding rather than the 'Opticure'.
Tarun and Iscon say that the First Contract had been varied, in that two Samso branded machines had been shipped from India to Perth, notwithstanding Jeeth's non-compliance with the terms of the Distributorship Agreement.

[13]

FACTUAL BACKGROUND

On 1 March 2015, Tarun was appointed as the 'Official Global Representative' for Opticure. When he was cross-examined, Tarun said he had not been a director of Opticure. Nor was he an employee. He identified himself as Opticure's 'representative'. He had come to be associated with Opticure because it was his brother, Sajiv Sachdeva, who had first made the product. He was married to Seema Sachdeva, the Second Defendant. He said he played no role in Opticure's management; nor was he in any position of control. He had no power of attorney conferred on him. He said he was responsible for sales of the product in India and most of the sales outside of that country, including Australia.
In early 2015, Jeeth was looking for a business opportunity to pursue. In his affidavit, Jeeth said that his interest was drawn to what appears to be a revolutionary product that could print on walls in situ. He watched an episode of the popular television show "The Block" and saw the results of a wall printer manufactured by the Australian company Zeescape. Thereafter, he conducted some research over the Internet and discovered that a wall printing machine similar to that which he had seen manufactured by Zeescape was manufactured in India by a company called Opticure. The advertisement on that company's Internet page identified Mr Sanjeev Sachdeva as a point of contact at Opticure.
Between April and May 2015 Jeeth rang the mobile number and spoke to a person who he later identified as Tarun, whilst the latter was in India. Jeeth had seen video clips over the Internet about printing machines and was interested to learn about Opticure and its printing machines. In this period there was an agreement between Jeeth to meet with Tarun in Melbourne. Tarun requested that Jeeth produce some financial documents so as to establish his financial capacity to act as a potential distributor of printing machines in Australia. Some financial documents were emailed to Tarun for this purpose.
Around this time, Tarun says he told Jeeth that he was a representative for Opticure.
In his affidavit, Jeeth says that, amongst other things, that Tarun had told him (whilst he was in India) over the telephone in April or May 2015 that "our" (Opticure's) machines were "world class", and "revolutionary", and that "we could provide "superior after sales support".
In his affidavit, Tarun denied saying that Opticure's machines were 'revolutionary'. Under cross-examination, he denied statements attributed to him by Jeeth (and/or Ms Khabiya), among them, that Opticure's machines were 'world class' and, unlike Zeescape, it could provide superior after sales support. He also denied saying that upon payment, Opticure's printing machines were ready for distribution. He denied using the words 'highest quality' when 'ranking' Opticure's products; but, instead, said that he told Jeeth that they were of good quality, and even superior, in comparison with Zeescape's product, which had been manufactured in China.

[14]

Meeting on 22 May 2015

On 20 May 2015, Jeeth and his wife left Perth to go to Melbourne to stay at the Citadines Hotel. They stayed there for two nights before returning to Perth late on 22 May.
On 22 May 2015, Jeeth, and his wife (Ms Sonal Khabiya) met Tarun at the Citadines Hotel. They discussed a potential appointment of Jeeth as a distributor. Jeeth's recollections about how many times he saw Tarun on 21 and 22 May were not strong. However he thought he had meetings with him over both days. Ms Khabiya also thought meetings had occurred over both days.
It became apparent during the course of his cross-examination that there was a lack of certainty or recollection as to what extent Jeeth had kept a contemporaneous record of what was discussed during these meetings. He accepted that it was not his normal practice to take handwritten notes. However he did so on this occasion. Those handwritten notes were subsequently discarded. Nevertheless, Jeeth's evidence was that the handwritten notes formed the basis for his formulation of a 'Memorandum of Understanding' [2] . Later, he said there was another note of the meeting generated electronically.
In his first affidavit, Jeeth deposed to Tarun saying, at this meeting, amongst other things, that "our machines are of the highest quality. They are revolutionary and they will set the standard around the world". It was put to Jeeth in cross-examination that Tarun had never said that the machines were of the "highest quality", but Jeeth maintained that he had.
Jeeth also deposed in his affidavit to his recollection that Tarun had said, during the same meeting "we will assist you with after sales service. If you are a customer who needs a part - you will receive what is needed right away. There will be no delay." It was put to Jeeth in cross-examination that his subsequent complaint was not that no assistance had been provided by Tarun; merely the adequacy of such assistance. I understood Jeeth to accept that this was so. Nevertheless, he accepted that Tarun had sent him a range of emails responding to concerns that Jeeth had raised. The machines were still in his possession.
Further, Jeeth deposed in his affidavit to Tarun to parts of conversations during this day in which the exchange went as follows: "I said: I would have the arrangements in place and machines here in Australia before 30 June. I want the distribution agreement to start this financial year. There are tax advantages for me in doing so and June is a good month to get lots of sales and I would like to advertise the end of financial year sales. Tarun replied: yes that will be possible. If anything goes wrong I will refund your money." and later "Tarun said: Jeeth, please see my property mortgage document with ANZ for Parkmead Way under my name, and for my other property, please see this real estate agent contract that is currently under rental and my name is on the lease document which has the address of the property I said: that looks good. Tarun: Jeeth, you have seen all my financial details, and if anything goes wrong, I give you my personal assurance, and I will be personally liable, and you can also mention this in the MOU and agreement, and you have my word on it. I have run businesses myself and I understand you're starting a new business and I will be there to take you through, this journey, as we have helped many small businesses in the past and (sic) not new to such things."
In is affidavit, Jeeth continued deposing to his conversations with Tarun. He deposed that after drafting a Memorandum of Understanding in Tarun's presence, he and his wife left the hotel to talk and to find a bank. He recalled that at this point, Tarun called him and said: "I will personally liable and please include that in the MOU".
Thereafter, he deposed in his affidavit, he specifically included reference in the MOU to Tarun being personally liable in respect to the machine payments. He says he later watched Tarun sign the MOU; after handing over his cheque for AU$22,500. Jeeth deposed in his affidavit that in signing the MOU that he relied upon Tarun informing him that he would be personally liable if Jeeth made the payments as the basis of deciding to proceed with the deal. He specifically says that he would not have proceeded with the business deal if Tarun had not told him that he would be personally liable for the payments. He also says that he relied upon both of the representations as to the quality of the manufacture and after sales support. He said that these matters were important to him: he wanted to be part of a business that offered leading quality products and high standards of customer service.
Under cross-examination, Jeeth's evidence of these statements about personal liability was closely scrutinised. He could not remember how many times Tarun said the statements (although recalled that there were multiple times). He could not remember whether it was the morning of 22 May or at lunch. Such handwritten file notes as he says he took of the meeting had been discarded. It was put to him that Tarun had never signed any personal undertaking. To this, Jeeth responded that his version of the memorandum of understanding was signed by Tarun at the Citadines hotel on 22 May and he thought that Tarun had retained such (signed) version even though he, himself had not retained a signed version. It did not occur to him to ask for a photocopy, or even take a photograph, of this signed version.
Jeeth was also referred, when under cross-examination, to an undated typed document [3] . It appears to be a transcription of conversation Jeeth had with Tarun of what was said on 21 or 22 May; however, Jeeth could not remember whether he had typed it on those days. He thought it was possible that the document had been created by him using a "OneNote" facility on his mobile phone. Later, in re-examination, it emerged that a document similar in content to this did appear on his mobile phone in the "OneNote" file and that it had been modified more than two years ago. As to the content of this undated typed note, it did, relevantly, contain the following statement: "Tarun to Jeeth: Jeeth you have also seen all my financial details, and if anything goes wrong I give your personal assurance, and I will be personally liable, and you can also mention this in the MOU and agreement, and you got my words. I have run the businesses myself, and I understand you're starting a new business, and I will be there to take you through this journey as we have helped many small businesses in the past and not new to such things".
In her affidavit, Ms Khabiya deposed to her recollections what was said in the meeting in Melbourne on 22 May. She recalled Tarun saying to her: "I have been travelling all over the world. What I have discovered is this type of quality you will not find in other like machines made by Zeescape. I have bought the same machine that Zeescape uses. It is from China. It has a lot of problems. … If you buy from us you will not have any problems. You will get the best quality and service from us. We are different from Zeescape. Our printing is revolutionary. You will start earning from day one. It only takes one person to use a machine. You will get our support if there are any problems. If you go with us we will send you marketing video you can use to show customers."
Ms Khabiya also deposed, during the same meeting in Melbourne on 22 May, to Tarun saying the following on the subject of security: "I will be personally liable if anything goes wrong with you guys. This is my business and after all the work I have done I know you will not get a better product in the marketplace. If you need support or any service I will make sure that it happens. You can trust me."
She then deposed that Karen had showed her a copy of a lease document. She also recalled that after Tarun had made the above statement, Jeeth had asked him to confirm that in writing; to which Tarun responded "yes, we can put that in any agreement we reach. I will be personally liable."
Under cross-examination, Ms Khabiya confirmed that Jeeth had taken handwritten notes and, further, that these had been used by him to create his version of the Memorandum of Understanding on 22 May. She could not identify any other, additional document that he had typed. She was shown the undated typed document said to have been created by Jeeth on 'OneNote' on his mobile phone. After some ambivalence, she confirmed that she had not created it; and neither had Tarun. She did not see Jeeth type on his computer and she could not confirm that this additional document had been created in the hotel room.
She also purported to corroborate Jeeth's evidence that Tarun and Jeeth had signed the latter's version of the Memorandum of Understanding. She had seen this document in Jeeth's hands near the lobby. She recalled it being printed out at reception. She could not recall where, within the document, it had been signed. Curiously, she said she had suggested to Jeeth that some proof should be taken of the signed copy, but she added that Tarun had rejected the idea of a photo being taken of it. She could not identify any request for a signed copy being made in writing.
She was challenged on her evidence that Tarun had given an undertaking as to his personal liability. She maintained that he had said he would be personally liable on both days of the meeting. She accepted that it was important to have such undertaking recorded in writing. She regarded the (missing) signed version of the Memorandum of Understanding as satisfying that particular requirement.
In his affidavit, and again under cross-examination, Tarun denied representing that he would be personally liable if something went wrong with the distributorship agreement. He also generally denied Jeeth's account of what was said during the meeting. He accepted, on the other hand, that he would be personally liable for the return of the cheque for $22,500 which Mr Khabiya had given him if the agreement did not proceed. Tarun explained the circumstances in which this promise about the cheque arose. He said that at the meeting on 22 May, Jeeth had wanted to secure distribution rights and had asked Tarun about the bank details for Opticure. Tarun explained that because he did not have the bank details for Opticure, on hand, at the time and due to the time difference between Australia and India (which meant he could not ascertain the bank details), Jeeth wrote a cheque for him personally for the sum of $22,500 to indicate the seriousness of his intent about entering into the distributorship agreement.
It was put to Tarun in cross-examination that he had a personal or financial interest in vigorously 'promoting' these machines to Jeeth (and Ms Khabiya). It was put, and Tarun accepted, that no distributor had been appointed (anywhere else in the world) and that he stood to gain from Jeeth's appointment. Tarun disputed this. He said he did not get paid anything, per se, from the appointment of a distributor; but would receive 5% of commission on sales. He had other sources of income at that point. It was put that he was "keen" about the prospect of Jeeth being appointed as a distributor. Tarun disputed this. It was also suggested that he was motivated to 'promote' the machines in the best possible light. To this, Tarun said that he was not responsible for promotion of the product - if someone made an inquiry of it, he would field the inquiry.
More directly, it was put to Tarun that he had represented to Jeeth (on either or both 21 or 22 May) that the machines were of "high quality". Tarun said he only thought he had represented that they were of good quality; meaning that they were fit for purpose and had, or perhaps were capable, of performing well.
It is at least clear that on this date, the plaintiff made out a cheque to Tarun for the sum of $22,500 and that Jeeth emailed to Tarun a 'Memorandum of Understanding'.

[15]

Different versions of the 'Memorandum of Understanding'

After the meeting, on 22 May 2015, Jeeth sent (by email) to Tarun what he described as his version of a memorandum of the understanding that had been reached at the meeting. The document contained 14 points. Tarun's evidence was that he did not assist Jeeth to prepare this document. Tarun said he only saw it for the first time when he had received it by email (and responded to it by email on 23 May).
In the view of the issues in this proceeding, it is not necessary to identify each point. It suffices, initially, to note that point 1 was expressed in the language of Jeeth's "offer" to "represent" Opticure as its Australia-wide sole representative, and sole distributor of all of their products in Western Australia, Northern Territory and Adelaide, with other rights to distribute in other parts of Australia. Further:

Point 8 indicated that on 22 June 2015 (which Jeeth subsequently corrected to 22 May 2015) SAMSO Wall Painting would make a 50% advance payment for 1 off items 3.1, 3.2 and 3.3 (sic) In the name of Tarun Kumar Sachdeva".
Point 10 stated that a final legal agreement between Opticure and Samso would be finalised between 25 and 26 May 2015 at Perth and additional of that payment will be made.
Point 13 provided that in case both the part(ies) were unable to come to an agreement on the entire agreement by 22 May 2015 ('Stage 1') and execute the specific items of 5 and item 6 by 25 June 2015 ('Stage 2') then all the advance payment made including cheques/online transaction etc .. Will be refunded to SAMSO Wall Printing and the whole agreements need to be re-negotiated between 10 June - 25 June 15 (sic).
Point 14 was expressed as "Mr Tarun Sachdeva will be personally liable for this payments."

In cross-examination, it was put to Jeeth that he understood that Tarun's personal undertaking was a reference only to the $22,500. Jeeth maintained that it was personal liability in relation to all dealings.
It was put to Tarun, when he was cross-examined, that he had not positively disclaimed the correctness of what was said in point 14. He also said that, on behalf of Opticure, he made no promise that machines could be provided by June; but rather, it would try its best to achieve that outcome.
Jeeth indicated in cross-examination that after the meeting on 22 May, he had engaged his accountant, Mr Garg, to assist him to facilitate the entry into an arrangement with Opticure. This mainly consisted of him adopting a template-form for a contract. By then he had mentioned to Mr Garg that he was exploring business opportunities with Opticure. Jeeth accepted (and an email indicates) that on 23 May 2015, he had on-sent, by email, the memorandum of understanding referred to in the last paragraph. This was to keep Mr Garg "in the loop".
On 23 May 2015, Tarun sent an email to Jeeth, saying it was a pleasure to meet him and his wife and acknowledging receipt of the cheque for $22,500 and stating that it would be fully refundable if the agreement did not go through. In his affidavit, Tarun denied making any personal guarantees, other than undertaking to be personally liable for the cheque if the agreement did not eventuate. It was put to Jeeth in cross-examination that there was no reference here, by Tarun, to signing Jeeth's version of a Memorandum of Understanding. Nevertheless, Jeeth interpreted the message as his acknowledgement of Jeeth's earlier version of the MOU.
On 25 May 2015, Tarun sent an email to Jeeth (apparently copied to Sanjiv Sachdeva) attaching a memorandum of understanding (dated 24 May), which set out the proposal terms which Tarun says had been prepared after discussions with Sanjiv Sachdeva (Manager of Operations at Opticure). This was a very different version to the version of a memorandum of understanding which Jeeth had sent to him only days before. Most relevantly, in the present context, it said nothing about his assuming or undertaking any personal liability of any kind. Indeed, it contained no description of any personal obligations on Tarun's part of any kind.
Under cross-examination, Jeeth said he was 'confused as to why he received this document'. Nevertheless, he on-sent it to Mr Garg the same day.
Tarun emphasises that this document does not refer to his guaranteeing the obligations of any parties to that document (or any potential contract).

[16]

Meeting on 26 May 2015 - entry into the Distributorship agreement

On this day, Jeeth met Tarun again, this time in Perth (in the East Cannington Library). Also present was Mr Garg, Jeeth's accountant. Jeeth had met and spoken with Mr Garg earlier that day but could not recall what was discussed. He could not recall discussion with Mr Garg about the two versions of the memoranda of understanding exchanged with Tarun. The day before he had asked Mr Garg to obtain or prepare a template for a prospective agreement. The template version which he saw, prior to the meeting, did not provide content for schedules A, B, C or D.
The meetings with Tarun that occurred on 26 May were broken up. There were initial meeting(s) at the library. Thereafter, there was a meeting at Mr Garg's residence that was nearby. At the former meeting Mr Garg had arrived with multiple copies of a prospective distributorship agreement. Thereafter and throughout the day, Mr Jeeth (with his wife) and Tarun worked through the body of the agreement.
Jeeth put a proposal for being the exclusive distributor for the territories of South Australia, Western Australia and the Northern Territory. Tarun proposed that 10 machines would be purchased over the course of one year, or buying the machines instead and operating a wall printing business if he did not want to be a distributor. Tarun returned the cheque provided to him on 22 May.
After a 3 hour interval, during which Jeeth consulted Mr Garg, the meeting reconvened at Mr Garg's residence, where a pre-drafted non-exclusive distributorship agreement was provided to him for his review. Both of them signed a Distributorship Agreement. The parties to the agreement were Jeeth (or at least his trading name) and the business name given to Opticure. Tarun, as indicated, signed on behalf of Opticure. This document attached a Memorandum of Understanding. Opticure's banking details were also provided to Jeeth. It was during this meeting, Tarun says, that he returned the cheque that had been given to him on 22 May. In receiving it, he deposed in his affidavit, he recalled telling Jeeth that it had been addressed to the wrong party, and should have been addressed to the contracting party - Opticure.
Under cross-examination, Jeeth said that he had excised a provision within the Distributor agreement relating to Tarun's personal liability. He had said that it was his version of the memorandum of understanding which was the antecedent version for what eventually became Schedule D. It was suggested to Jeeth that he had copied and pasted Tarun's version of the MOU in Schedule D, but Jeeth disputed this. That evidence, however, does not appear to be right. A cursory comparison between Schedule D and the two earlier versions of the Memoranda of Understanding indicates a greater similarity with Tarun's version than Jeeth's version; even if schedule D contained fewer clauses. At any rate, when asked why he would excise such provision, Jeeth explained that in view of his understanding as to Tarun's position (as a director of Opticure Solution), which was comparable with his own position as a director of a business, he similarly assumed that if things went awry, Tarun would be personally liable.
When she was cross-examined, Ms Khabiya said that Jeeth was responsible for inserting everything into the template that Mr Garg had provided.
In his cross-examination, Tarun was challenged on why he executed the Distributorship Agreement on Opticure's behalf and, in particular, why he affixed his name under the word 'director' when he was not a director of Opticure. Tarun said that he had explained this circumstance but was assured that it would not matter - Jeeth's accountant would 'change that matter over'.
Material terms of the Distributor Agreement were ultimately as follows: 1. Opticure was to deliver to Jeeth, and Jeeth was to pay Opticure R$13,500,000 for the "Products", being six printer heads, six railing and stands, cartridge and cleaning chemicals; and six customised laptops, ink supply system sundry items dampers extra tubing, cable connectors and moving belts (cll 10.4, 11. & Sch B & C); 2. the current prices for the products (in Indian Rupees) were set out in schedule B (cll 10.1) and those prices were not to be increased for any of the products until the expiry of the first year and three months of the agreement (cl 10.2) 3. the products would be 'fit and merchantable', and would meet and be in accordance with the law of the "Territory", being the law of Western Australia, Northern Territory and South Australia (cl 7.1(a), Sch A). 'Merchantable' meant saleable in the 'Territory' under its product description at its market price or, if applicable, fit for its ordinary purpose (cl 1.1). 4. where a product was defective and/or not merchantable, then so long as (i) Jeeth had properly stored the products; (ii) no 'use by date' had expired; and (iii) Jeeth had not altered, tampered with or adulterated the products and/or their packaging, Opticure must either replace or repair or pay the cost of replacing the defective products at her own cost (cl 7.1(b)(i)); 5. Opticure would provide Jeeth with suitable promotional and marketing materials in relation to the products throughout the term of the agreement (cl 6.1); 6. Opticure would provide Jeeth with all specifications (if any) required for use of the products by consumers (cl 6.3). 7. Either party had a right to terminate if the other committed a 'Material Breach' (cl 12.1). 'Material breach' included, relevantly, any breach of an "essential term". 8. Upon termination, Opticure was obliged to deliver sufficient quantities of the products ordered by Jeeth so as to allow it to satisfy all of its outstanding contractual obligations to its consumers or assume such responsibility directly herself (cl 12.2); 9. the parties chose the 'Law of Australia' as the system of law to govern their rights and obligations and the parties agreed to submit to the jurisdiction of the courts of the State or Territory in which the 'Territory' was located (cl 14.1). A dispute resolution mechanism was also included (cl 14.2). 10. An 'entire agreement' clause was included (cl 17). 11. The parties acknowledged and represented to each other that they had had the opportunity to seek and obtain separate and independent legal advice prior to entering into the agreement (cl 22.1).
Jeeth accepted that he read the 'entire agreement' clause in clause 17 prior to signing the agreement.
Further, incorporated within the distributorship agreement was a 'Memorandum of Understanding'. Tarun also signed this document on Opticure's behalf as its agent. Three of the material terms of that document relied upon by Mr Khabiya were that: 1. Opticure would "do its best" to deliver the first two sets of items (priced under 3.1, 3.2 and 3.3 to Schedule B) before 25 June 2015. If this did not happen, then Opticure would refund all the payments made by Mr Khabiya and re-negotiate the entire terms of the signed agreement. This term was described as "essential" (par 13) 2. Opticure "will (sic) be initial first payment on 26 May in this payment transaction is expect (sic) to complete within five business days" (par 11) 3. warranty and technical support of the supplied product lies with Optciure Solutions (par 14).
On 28 May 2015, Jeeth sent emails to Tarun, placing orders for printing machine parts, being a printing head, and another for printing machine parts for customised accessories; and asking for an invoice. Later that day, Tarun sent an email to Mr Garg enclosing invoices for these orders.
On 29 May 2015 Jeeth transferred the sum of $93,035.22 to Opticure. He did not receive confirmation the payment had been received until 4 or 7 June. Jeeth explained that this was in large part due to a halt which he had placed upon the processing, for the purposes of 'verification'. This was notwithstanding the circumstances that, in a context where the date for delivery is 26 June, he was aware that Opticure would not start the manufacturing process until it had received payment.
On 1 June 2015, Jeeth sent an email to Tarun, requesting a factory visit in India to facilitate his 'due diligence' exercises and outlined a timeframe for the agreement, moving forward.
On 2 June 2015, Tarun sent an email to Jeeth. The email reminded Jeeth that the product was still in the 'testing' stage and would soon be launched properly on Opticure' website. Training would take place at Opticure's studio; not at the factory. At this point, no receipt of payment transfer had been received by Opticure since the distributorship agreement had been signed. But receipt of the payment was acknowledged the next day.
By early June 2015, Jeeth was starting to become uneasy about the prospect of whether the machines which he had ordered would be delivered later that month. He said in his affidavit that he understood that Tarun was asserting, for the first time, that the product was only in testing stage and would be launched soon. In response to this part of his affidavit, however, under cross-examination, Jeeth was referred to his own earlier version of the memorandum of understanding, in which (at point 2) SAMSO Wall Printing had requested a (preliminary) order for the newer model of the printing machine to be tested and launched in June. Jeeth said he only learnt about this during his verification, but he eventually accepted that the product that he was wanting to buy was in the process of being tested.
Jeeth deposed in his affidavit to a telephone conversation with Tarun on 3 June 2015. In that affidavit, his account of the conversation was as follows: "I said: I am concerned with the lack of transparency so far you have not even given me any real pictures of the machine from your production and any detailed technical specification? Tarun: I will email you quality pictures. I said: OK. As part of your personal assurances that you will be personally liable, you had earlier show me your property details and ID on the phone. However I do need a formal communication of both of your property details by email for my record. Please send me both property details, passport ID, overseas citizenship etc by email. These are the same documents that you showed me on the phone during our Melbourne meeting. And I also need a security check urgently. Tarun: you will have the machines with the highest quality - there is no need to worry. It's a very busy time for us let me focus on production and testing please and also provide the details of the person who like to do verification etc and collect the security check and then become back to you. Tarun: Jeeth, I have given you my words earlier and I think also send you those documents by 'What's App' earlier. For your peace of mind let me forward those documents by email and please feel free to contact my real estate agent if you need any reference check done on my property etc and I will clearly mention their contact details in the email authorising to do so."
Jeeth was questioned, in cross-examination, as to why, at this point, he had not reminded Tarun about his personal liability undertaking. Jeeth said he did this when Tarun had provided his property details, before Jeeth had released the payment. It was also put that to the extent that Tarun had said anything about being personally liable, it was merely a reference to the past statement that he had made on 22 May. Jeeth's response was that this representation was ongoing. He denied that he taken no note of this particular conversation; though he accepted that he had not produced it during the course of the proceeding. It was put to him that he was making up this conversation but Jeeth denied doing so.
In his affidavit (of 10 May 2019), Tarun denied this account of the conversation. Instead, Tarun deposed to informing Jeeth that his business adviser had suggested he conduct some due diligence on Opticure. To that end, Jeeth was asking for details about his personal property, and a copy of his passport or overseas citizenship. Though he thought that the requests were odd, he supplied information by email that day. There is nothing in this account to support the notion of any reassurance by him to Mr Khabiya that he would be liable for any losses suffered under the distributorship agreement.
On 4 June 2015, Jeeth sent an email to Tarun outlining a proposal to move forward. It set out five points for discussion, including a new model of the machine and attached photographs.
On 4 June 2015, Jeeth placed an order with Zeescape for an alternative machine. In cross-examination, Jeeth said that he had placed the order with an Australian resident but later cancelled the order. He had not sought Mr Garg's advice to enter such transaction.
On 6 June 2015, Jeeth sought additional information from Tarun. His representative attended the factory in India.
On 7 June 2015, Tarun sent an email to Jeeth. The email confirms the issue of a post - dated cheque to Jeeth's representative, Surrender Gupta, on Jeeth's behalf, totalling R$45,000,000. As security to Jeeth ahead of the dispatch of the wall printing machines as requested. On the same day, Tarun notified Jeeth of new email addresses, including an Australian email address for Iscon.
On 13 June 2015 Tarun sent an email to Jeeth. His message confirmed that Opticure would be doing the trials of the printing machine by 21 June 2015 and that that would include an ink trial. The ink and chemicals were classified as 'dangerous goods', but had previously been successfully shipped in the past.
On 16 June 2015, Jeeth sent emails to Tarun attaching photographs of new and old machines.
On 17 June 2015, Jeeth sent an email to Tarun complaining that the delay in providing him with training, 10 videos and other marketing support was causing him grief and affecting his marketing and the operational side of his business.
On 19 June 2015, Tarun sent an email to Jeeth advising the testing of the new machines had given positive results and reminding Jeeth what it had done for him: pointing out that Jeeth's request for verification had delayed production; that he had rescheduled other production and marketing trips in order to meet Jeeth's order and had issued post-dated cheques at Jeeth's request (contrary to usual company policy); and had issued photographs and videos of the new machines after Jeeth's continuing requests.
On 19 June 2015, Jeeth placed an advertisement on 'Gumtree' for a business investor.
On 20 June 2015, Tarun sent an email to Jeeth advising Opticure was 'ready to dispatch' the first lot of machines and demanding further payments before dispatch. The same day, Jeeth sent an email to Tarun responding to his demands for further payment. In it he asserted that full payment of the printing machines had already been made.
On 21 June 2015, Tarun sent an email to Jeeth. The message relevantly noted: 1. the distribution agreement had referred to 6 machines, and now Jeeth was attempting to say that there were only two machines; 2. the payment needed to be made for a deal not for two machines but the six machines (with reference to clause 10.5 of the Distributorship Agreement); and 3. Jeeth's attempts to alter the terms of the agreement.
Later that day, Jeeth sent an email to Tarun suggesting that they not waste time or involve lawyers. Complaints were made about a lack of trust and Opticure's failure to provide videos and pictures for marketing purposes at a forthcoming expo.
On 21 June 2015, Tarun sent a further message to Jeeth, in which he conveyed his belief that Jeeth's expectations were too high. He provided an alternative suggestion that all the machines be bought in one go. If that was acceptable, money could be transferred into his lawyers trust account and then, after delivery of the six machines, the lawyers could release payment to Opticure. Any deposits into the trust account needed to be paid 50% in advance and 50% on delivery. Dispatch could occur when 50% was received for the machine. Tarun sought a decision from Jeeth the next day.
On 22 June 2015, Jeeth sent an email to Tarun repeating that their impasse about the payment was not because of any inability (on his part) to pay, but because of a lack of trust. The email was expressed in somewhat emotive terms. It was put to Jeeth in cross-examination, and Jeeth did not dispute, that at this point he had not referred Tarun to his undertaking to be personally liable.
At about this point, Jeeth engaged lawyers, Messrs Culshaw Miller. A letter was from that firm was sent to Tarun on 23 June 2015. The letter asserted, amongst other things, that payment had been made to machines, but no receipt of those machines had been made and that Opticure had demanded the final payment be made prior to delivery. This insistence upon final payment was said to be in breach of the distributorship agreement. The letter also complained about an absence of training and a failure to deliver videos; being matters which were also in breach of the agreement. The letter culminated by demanding delivery to the warehouse in Western Australia that had been nominated by Jeeth, all the return of his deposit. It also sought confirmation that the defendants could perform the agreement.
It was also pointed out to Jeeth, in cross-examination, and not disputed by Jeeth, that there was no reference within this letter of demand to any personal undertaking provided by Tarun.
Not long after this letter of demand, on the same day, Tarun and Jeeth commenced to have some more positive telephone conversations, on a daily basis.
On 24 June 2015, Jeeth told Tarun, during a telephone call, that he was still interested in purchasing six machines, as per the initial commitment in the distributorship agreement. He said he was happy for 'Opticure India' to send the printing machines to 'Opticure Australia' (Victoria) and then to him in Perth; rather than directly from; from India to Perth. Jeeth said that he was happy to pay the additional shipping charges as he would be saving money by not having to convert rupees into Australian currency.
On 26 June 2015, there were several pieces of correspondence from Mr Garg, being Jeeth's accountants and business adviser; including a request by Mr Garg for the Opticure logo and official contact details to be added to the updated invoices.
The same day, Tarun received an email from the Commonwealth Bank of Australia, stating that $1,200 have been transferred from Jeeth for a delivery fee. On 29 June, another transfer was made to Tarun on behalf of Jeeth, for the sum of $9,273.78.
Between 18 July and 20 July 2015, the plaintiff's wife, Ms Khabiya, visited the Opticure Indian studios. This visit was for 2 days. She made a second visit between 4 and 7 August 2015. That visit was for 3 days. These trips were utilised to train her in the use of the machine. Film clips were shown during her cross-examination which showed, firstly, that Tarun was giving her lessons on the software; and, secondly, demonstrating the wiring and other use of what might be called the 'hardware' part of the machinery. Ms Khabiya accepted under cross-examination that for sophisticated equipment like this, she needed weeks of training.
On 7 August 2015, Mr Khabiya signed a tax invoice (dated 6 August 2015) acknowledging receipt of the items.
On 18 August 2015, Jeeth's lawyers, Culshaw Miller, wrote to Opticure. It referred to the circumstances that no response had been received to its early communication of 24 June 2015. It alleged non-performance, which constituted a repudiation of the distributorship agreement. It gave notice of Jeeth's acceptance of that repudiation and it demanded repayment of all payments made by Jeeth.
On 23 August 2015, Tarun sent emails to Jeeth demanding further payment. Later that day, Jeeth confirmed payment had been made. At this point, Tarun says that there was nothing in these documents to support the notion that guaranteed obligations in relation to the reception of goods that had already been shipped to Australia. Jeeth did not depose to any conversation with Tarun on this day.
On 25 August 2015 two machines were dispatched and received on Jeeth's behalf, in Perth. Ms Khabiya gave evidence that her role, in the business, was to look after the sales and the printing part of it. This required her to operate the machine.
Under cross-examination, Tarun said that the machines that were packaged and sent were the ones that were the subject of demonstration (to Ms Khabiya or Jeeth).
On 29 September 2015, Opticure sent emails Jeeth foreshadowing that the second lot of machines were due for dispatch.
On 28 October 2015, Jeeth sent an email to Tarun saying that there was a need to discuss issues over the telephone. If they could get simple solutions directly, they would have to go and look for technical support in the market with a third party. He complained that his call had not been returned within 24 hours and that this created mistrust. He asked Tarun to call them with a view to resolving the 'simple stuff' first and then the more controversial items.
On 29 October 2015, Mr Tarun sent an email to Tarun relating to a courier company.

[18]

Ms Khabiya's affidavit evidence

In her affidavit, Ms Khabiya deposed to observations when the two machines arrived at her home in September 2015. She said that the machines did not resemble the machine that had been shown in Tarun's studio. On one of them she saw visible rust marks on part of machine, screws missing and breakages in the metal. Her opinion was that the machines were not new. She was disappointed also not to receive any instruction manual.
She said that on or about 12 September 2015, Jeeth and her had tested one of the machines. After having done so she observed the following problems: (a) the machine would was not calibrated properly so it would not print correctly; (b) Ink continually spilled from the print head; (c) the print head kept on drying out if the machine was used non-stop: a short break in printing would result in the print head drying out and then requiring purging with the solvent; (d) purging took approximately one hour, on each occasion, due to air bubbles formed in the ink print head; (e) the print was bad quality; (f) the printer was not printing in the way demonstrated in the two videos that she had seen in Melbourne back in May; or on her visit to India; (g) ink started to leak onto the floor and over the machine; (h) the software on the laptop was playing up and started to crash, on average, of every third file; (i) the software on the laptop did not appear to be licensed; (j) the machine was not operating in an uninterrupted fashion - there was much more time spent purging the machine rather than actually printing; (k) significant numbers of bottles of ink were wasted; (l) as the print head kept drying out it was impossible to start and complete a printing job in one go.
She said that as a result of these problems she sent a message, via 'Whats App' to email to Tarun, seeking technical support.
She says that on 14 September, Jeeth and her attempted to undertake further printing. By this stage, they had not heard back from Taryn and had not received the technical support that they had sort. The outcome of the attempt was that the quality of the picture was blurred. Indeed after 14 September, she said that she could not get the machine to print any pictures.
She recalled trying to contact Tarun on several occasions in the period 14 September to 26 October 2015. In this period she could not get the machines to print. She also complained that the trolleys that had been supplied were not able to adequately move the machine.

[24]

Jeethender Khabiya

I did not regard Jeeth as a reliable witness. Making allowance for the circumstance that he was giving evidence about events over 4 years before, at its best, his evidence was peppered with answers that he could "not remember" matters. Some of these things which he could not recall were more material than others. The more material events concerned his recollections of what contemporaneous records he took of important meetings, such as those which occurred on 21 and 22 May. But although some of his answers were that he did not remember whether a typed note which appeared in an exhibit was generated on Microsoft 'Word', or Microsoft 'One Note' might partly be explicable by the subsequent passage of time, too often his evidence veered from a position of an absence of recollection, towards stating a position, then only to shift from that position that he had advanced during questioning of him. He shifted for example, when asked about his practices of taking handwritten notes of conversations: from one of general denial; and then to the use of them in only exceptional circumstances once confronted with evidence that was inconsistent with his testimony. He shifted his evidence when asked about when he started receiving expressions of interest from prospective customers: at first, he said that there was no expression of interest for the purchase from him of such machines forthcoming prior to the date the distributorship agreement was entered (26 May); but later, he said he had received 'representations'.
I formed the strong impression that not only did he guess, but also that he guessed in a fashion which he thought might advance his case. He was guarded in certain instances: when he was cross-examined as to how the amount for the cheque he provided to Tarun (AUD$22,500), he struck me as unnecessarily clutching for some other explanation other than the obvious explanation that this was 50% of the purchase price for one of the machines he was proposing to purchase. I also thought he was too readily disposed to shift responsibility for the content of the distributorship agreement to his accountant, Mr Garg (who he did not call as a witness on his behalf).
I am not prepared to accept his evidence uncorroborated by other reliable evidence or unless it is consistent with the objective probabilities.

[27]

Was the First Contract terminated?

An initial question must be what contract with Opticure does Jeeth sue upon? For reasons that follow, I do not accept that there were two contracts, as Jeeth says occurred. The better view is that he sued upon the distributorship agreement entered into on 26 May 2015 and that despite what occurred in August 2015, that contract endured, at least until September or October. What happened after that was not clear; but precisely how it ended after that does not need to be determined.
In my view, clause 13 of the memorandum of understanding, embodied in the distributorship agreement, meant that if the two sets of items had not been delivered before 25 June 2015, then Jeeth was entitled to a refund of his payment made pursuant to the distributorship agreement, and if that (the provision of a refund) did not occur, then Jeeth was entitled to have the distributorship agreement re-negotiated. It did not say 'terminated'. That appears from an ordinary reading of the express words of that clause.
Clause 13 has to be construed alongside clause 11 of Schedule D. Although the language appears awry, the intention seems to be that within 5 days of its receipt of the 50% initial advance payment by Jeeth, the balance had to be paid within 5 business days. That does not appear to have occurred in this case.
Clauses 11 and 13 broadly resemble, in their combined operation, s 28 of the Sale of Goods Act 1895 (WA), whereby the seller's obligation to deliver is contingent upon the buyer's readiness and willingness to pay the price.
The circumstance that Opticure did not deliver the goods by 25 June 2015, nor refunded the money, at that point, did not itself confer a right to terminate upon Jeeth under the contract, in circumstances where it appears that Jeeth was unwilling or unable to pay the balance of the purchase price for the first set of machines within 5 days of 26 May 2015. Moreover, Jeeth did not attempt to prove that Opticure had not exercised its best endeavours to deliver the goods by that date.
The issues arise from the next part of the clause. This was an obligation, even after Opticure was required to refund the payments made to that point, to re-negotiate the entire terms of this signed agreement. There is, firstly, an ambiguity as to which signed agreement the reference is made to. It seems to me that the reference is made to the distributorship agreement as a whole, rather than simply the memorandum of understanding. Secondly, although there may be some doubt in the matter, it appears that the authorities countenance the enforceability of a promise to negotiate, and, logically, re-negotiate, existing arrangements [5] .
In this case, in breach of the distributorship agreement, Opticure did not refund any payment(s) arising from its failure to deliver the goods by 25 June 2015. However, although Jeeth was entitled to receive his refund for payments he had made, properly construed, the failure to make refund for non-delivery by that date did not trigger an express entitlement to terminate. Clause 13 of the memorandum of understanding in schedule D only triggered the mechanism whereby the parties were required to re-negotiate the existing terms.
But on 18 August 2015, it is clear that by solicitor's email to Tarun, Jeeth purported to accept an alleged repudiation by Opticure of the distributorship agreement. The email referred to, in this respect, specifically to the non-delivery of the product (two months' before) and generally asserted Opticure's unwillingness or inability to perform its obligations under the agreement. But the remedy conferred in clause 13 of the memorandum of understanding was a right to re-negotiate the entirety of the distributorship agreement. There is no specific complaint that Opticure did engage with Jeeth in a way that breached that requirement. The evidence indicates that it did engage, and that was in furtherance, of the performance of the agreement entered into in May 2015.
Alternatively, even if, contrary to my finding, there was a repudiation by Opticure, in my view, from 25 June, Jeeth's conduct amounted to an election to continue with furtherance of the distributorship agreement. In this way, for example, Ms Khabiya (as Jeeth's representative) visited India twice, in July and early August 2015, for the purposes of receiving the necessary training to operate the printing machines once they had been delivered. Jeeth himself attended, for training, in early August 2015. Further, Jeeth did not insist upon any renegotiation of any of the terms of the distributorship agreement. In this way, the contract remained on foot. Broadly speaking, what followed thereafter from June to August 2015 was conduct by the parties consistent with a common understanding that the First Contract remained on foot.
Further, I accept the submission of Counsel for the first defendant that there was no written or verbal evidence of a contract entered into in August 2015.
There was no consideration moving from Jeeth for any promises made by or on behalf of the (former) third defendant, Iscon. There was also no new consideration for any promise made by Opticure (or Tarun or Iscon) for any Second Contract. I reject the proposition that Iscon assumed obligations of Opticure that the latter held under the former contract. In my view, the goods that were delivered in August 2015 were referable to orders placed by Jeeth under the First Contract.
Finally, it makes no commercial sense to say, as Jeeth does, that the first distributorship agreement was substituted by a mere agreement to 'receive goods' that had 'already been shipped'. Jeeth was not a retail customer, but was acquiring the goods so that he could distribute them for profit. Without a right to distribute, the platform for a loss of profits claim disappears.
In the result, I find that there was only one contract or, put another way, the distributorship agreement entered into by Jeeth and Opticure on 25 May 2015 was still on foot when two of the machines were delivered to Jeeth on or about 25 August 2015.

[37]

Merchantability/fitness for purpose

On the basis of the unchallenged evidence of both Jeeth and Ms Khabiya, including also the film clips that were put before the Court on Jeeth's behalf, I find that the printing machines delivered on or about 25 August were not merchantable.
I am mindful, in this respect, that some attempt was made in Tarun's affidavit (especially at paragraph 169) to point to other potential explanations for the problems experienced, but none of these matters were put to either Jeeth or Ms Khabiya in their respective cross examination; and no attempt was made, on Opticure's behalf, to prove, for example, that the actual printing machines that had been delivered were "fit and merchantable".
In my view, once Jeeth established a prima facie case of defectiveness, which he plainly did, there was an evidentiary onus upon Opticure to establish alternative explanations for the problems. It had the greater resources and technical withal to do so, but did not do so.
Specifically, I accept the evidence of Ms Khabiya and accordingly find that: (a) the machine would was not calibrated properly so it would not print correctly; (b) Ink continually spilled from the printhead; (c) the printhead kept on drying out if the machine was used non-stop: a short break in printing would result in the printhead drying out and then requiring purging with the solvent; (d) purging took approximately one hour, on each occasion, due to air bubbles formed in the ink printhead; (e) the print was bad quality; (f) the printer was not printing in the way demonstrated in the two videos that she had seen in Melbourne back in May; or on her visit to India; (g) ink started to leak onto the floor and over the machine; (h) the software on the laptop was playing up and started to crash, on average, in every third file; (i) the software on the laptop did not appear to be licensed; (j) the machine was not operating in an uninterrupted fashion - there was much more time spent purging the machine rather than actually printing; (k) significant numbers of bottles of ink were wasted; (l) as the print head kept drying out it was impossible to start and complete a printing job in one go.

[39]

Opticure's special defences

I have already rejected the allegations in Opticure's defences that there are choice of law or forum clauses in the distributorship agreement which bar Jeeth's claim, or limit its liability under such claim, in this Court. It also must follow that any limitation of liability clause in Indian law did not apply to limit or exclude Jeeth's claim.
As I understand it, Opticure also relies upon the proposition that Jeeth had availed himself of a claim against the company run by her brother-in-law, which makes the claim against her not maintainable. In the absence of any other evidence, I take this to be a reference to Iscon. In her defence, Opticure said that such claim had been dismissed. I do not know what claim Opticure is referring to, in this regard. If she is referring to the claim against Iscon in this proceeding, that particular claim has now been struck out because of Iscon's deregistered status without any hearing on the merits. In any event, dismissal of Jeeth's claim against Iscon would not preclude Jeeth's claim against her. The only claim which Jeeth maintains against Opticure is a claim on a contract to which she is the only party. This ground of her Defence is rejected.
There were three other grounds of (special) defence. The first is the contention that Jeeth has, himself, been in breach of the distributorship agreement by failing to purchase the balance of (4) printing machines. That would not be a defence, however, but would form the basis for a cross-claim, which has never been brought. The factual substratum is not altogether clear. There is no evidence that the four machines were delivered; which, as I indicated earlier, was the conditional requirement for the seller of goods to receive payment. Opticure did not perform any obligation under cl 12.2(a) of the agreement. It is also illustrated by Opticure not taking any step to enliven its rights of termination under cl 12.3(a) and (c) of the agreement. It would be inappropriate, in the circumstances, to address this matter.
Secondly, contrary to the pleaded allegation in Opticure's Defence, there was no 21-day limit in which Jeeth was required to report the defect. There was provision in the distributorship agreement (cl 8.3) whereby, in its capacity as distributor, Jeeth was required to notify Opticure of complaints by 'Consumers' of the 'Products'. But the definition of 'Consumer' and the natural context for the application of this term, did not include Jeeth.
The third and final ground is the contention that Jeeth breached the agreement; essentially, by branding his products and conducting his business in his own name and not on behalf of Opticure. There is no evidence put before the Court, however, to sustain this pleaded allegation.

[40]

Damages for breach of warranty

By s 52(1) of the Sale of Goods Act 1895 (WA), where there is a breach of warranty by the seller, or where the buyer elects or is compelled to treat any breach of a condition on the part of the seller as a breach of warranty, the buyer is not by reason only of such breach of warranty entitled to reject the goods; but he may - 1. set up against the seller the breach of warranty in diminution or extinction of the price; 2. maintain an action against the seller for damages for the breach of warranty. 3. the measure of damages for breach of warranty is the estimated loss directly and naturally resulting, in the ordinary course of events, from the breach of warranty. 4. in the case of breach of warranty of quality such loss is, prima facie, the difference between the value of the goods at the time of delivery to the buyer and the value they would have had if they had answered to the warranty. 5. the fact that the buyer has set up the breach of warranty in diminution or extinction of the price does not prevent him from maintaining an action for the same breach of warranty if he has suffered further damage.
This provision reflects the general law, as illustrated in Mondel v Steel (1881) 151 ER 1288 at 1293-4. It is well established that where there is a breach of warranty in the relevant sense, the buyer has a choice of remedy: it can rely upon the breach of warranty as a set-off for its liability for the price when sued for it; it can claim damages for breach of the warranty and remain liable for the price; or it can exercise both remedies if it can establish a case for doing so. The buyer has the option either to maintain an action against the seller for the damages caused to it by the breach, or to wait until it is sued for the price and then set up the breach in diminution or extinction of price. By this means, the buyer can ensure that the seller does not recover the price where the damages for the breach of warranty are equal to or exceed the price (Sutton, Sales and Consumer Law (4th ed), LBC 1995), pp 670-671).
A distinction is drawn in the provision between a breach of warranty of quality and breach of other types of warranty. In the case of a breach of warranty of quality, the presumption (in s 52(3)) is that the estimated loss suffered by the buyer is the difference between the value of the goods the time of delivery and the value they would have had if they had fulfilled the warranty. This presumption is however liable to be displaced in an appropriate case with recourse to the general rule for recovery of damages, being the first rule in Hadley v Baxendale (1854) 156 ER 145 at 152 (s 52(2)).
I interpolate here that in my view, where the particular goods are defective but have, to some extent been used (albeit in a way which has caused loss), this may be a situation where, for the purposes of the buyer's right of recovery under section 52, the presumption in s 52(3) is displaced, since the defective goods are not readily re-saleable. [9]
Where a market-based award is inappropriate, it may be appropriate to award the reasonable cost of rectification or, if rectification is not practicable, the replacement value for the good. [10]

[48]

The proper defendant

In respect to his allegation of the 'highest quality' representation, Jeeth sued each of Tarun and Opticure [21] . In the alternative, Jeeth alleged that Tarun was 'knowingly involved' in Opticure' misleading or deceptive conduct and was therefore liable as an accessory. In respect to his allegation of the 'guarantee' representation, Jeeth sued only Tarun directly.
All of these representations were made (if made at all) by Tarun. The question is whether, assuming that each of these representations were made out, who is liable as a result of them. This is in a context where it is admitted that Tarun acted as the agent for Opticure.
It was established in Houghton v Arms [22] that the prohibitions (corresponding to ss 18 & 29 in the Australian Consumer Law) of the former Trade Practices Act 1974 (Cth) extend to employees and, by analogy, to representatives of other persons, under the relevant state-based Fair Trading Legislation (here, Victoria [23] ) even if the employee was not acting for himself or herself. The first defendant, however, seeks to distinguish Houghton from this case, on the basis that, in that case, there was no provision in state law that provided for accessorial liability [24] . The first defendant says that the only proper basis for any liability he might have was as agent for Opticure.
In my opinion, such distinction does not make for any difference. By the Australian Consumer Law and Fair Trading Act 2012 (Vic), the first defendant would be liable to damages under s 236 by engaging in misleading or deceptive conduct. It matters not whether his purpose in engaging in the misleading or deceptive conduct was to advance the interests of another person of entity. That would amount to a substantial reading down of the ambit of the protections provided for under the Australian Consumer Law, which the High Court said in Houghton was impermissible. Further, although it is now the position that, by the terms of s 236, a person may be liable directly or as accessory, I do not understand that the legislative intent is to exclude the possibility of direct liability where accessorial liability is established, or vice versa, in any given set of circumstances. It is notorious that the mental element necessary to establish accessorial liability is more stringent than that of direct liability. It appears to me counter-intuitive, if not contrary to any purposive construction of a statute designed to advance consumer protection, that a person suffering loss or damage from an agent's misleading or deceptive conduct must, in order to directly recover against the agent, prove an actual intention to mislead or deceive simply on the basis that the agent is acting on behalf of someone else's interests.
That means that, if they are made out, Tarun would be directly and personally liable for making them under the legislation.
But being, also the agent of Opticure, by reason of s 139C of the Competition and Consumer Act 2010 (Cth), Opticure is also deemed to be liable for misleading or deceptive, or false and misleading statements of its agent, acting in the course of his authority. So Opticure would also be liable as well.
In this context, my opinion, it is artificial to speak of accessorial liability. For accessorial liability to run, there must be three parties involved: the party who has suffered loss (Jeeth); the primary contravener of the prohibitions in s 18 (or s 29) (said to be Opticure and Tarun) and the party said to be 'knowingly involved' in the primary contravener's contravention (said to be Tarun) [25] .
In this case, to the extent that Opticure was a primary contravener, that could only be so because it is deemed to be liable, as principal, for the misleading conduct of its agent, Tarun. It makes little sense to say that Tarun was 'knowingly involved' in Tarun's misleading or deceptive conduct engaged in as Opticure's agent. Unless it can be shown, therefore, that Tarun was not directly liable for engaging in misleading or deceptive conduct, a plea of accessorial liability would not be capable of being established even if the misrepresentations were made out.

[49]

The causation element

Section 236(1) of the ACL (relevantly) confers an entitlement to damages upon a person who suffers (economic) loss or damage "because of" a contravention of the prohibition (in ss 18 or 29 of the ACL) against misleading or deceptive conduct, or false or misleading conduct. Relevant principles when considering this requirement are as follows.
First, this provision connotes a requirement for a claimant to establish a causal connection between the misleading or deceptive conduct and the claimant's loss or damage. It does not, by its terms, speak of 'reliance'. Nevertheless, in a context where the contravening conduct is said, as it was here, to be a misrepresentation to an individual (intended to induce a course of action), it is convenient, at least in practical shorthand terms, to speak of 'reliance' as being the relevant test (Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 at 525.9).
Second, there is authority, dating back to the cases involving the torts of deceit and misrepresentation, which has been applied in this statutory context, that reliance may be established on the basis that if a material representation is materially likely to induce a representee to enter into a contract and the person actually enters the contract, a fair inference arises that the representation operated as an inducement: Gould v Vaggelas (1985) 157 CLR 215.
However, in Campbell, the plurality (at [143]) had this to say about this inferential process of reasoning: "First, it is a proposition expressed in relation to the law of deceit, not the operation of statutory provisions the award of damages suffered by contravention of consumer protection provisions proscribing misleading or deceptive conduct. Secondly, the proposition carries within it a number of subsidiary questions, such as what is a "material" representation, and when is a material representation "calculated" to induce entry into a contract. Thirdly, because the proposition is directed to the drawing of inferences, consideration of its application must always attend closely to all of the evidence that is adduced that bears upon the question being examined." (emphasis supplied)
Thirdly, the misrepresentation needs only to have 'materially' contributed to the loss or damage suffered, even where other factors (including the claimant's own conduct) have played a more significant role (Henville v Walker per McHugh J at [105]). Another way of expressing the same point is to say, as Gaudron J did in Kenny & Good Pty Ltd v MGICA (1992) Ltd (1999) 199 CLR 413 at 425-426: "When a person claims to have taken, or refrained from taking, a particular course of action in reliance upon another's representation, the critical question, assuming the representation is one that might reasonably be relied upon, is whether, but for that representation, he or she would have taken that action. In that context, 'but for' does not signify a sine qua non or causative factor which, although necessary, is not sufficient to produce the result in question. Rather, it signifies the decisive consideration or one of the decisive considerations for taking the course of action in question." (emphasis supplied)
Fourthly, it is also well-established that, in this statutory context, it is inessential that the misleading or deceptive conduct (here a misrepresentation) be the sole cause of the person's loss or damage. Moreover, subject to a qualification, it is not even essential that it be shown that representee acted reasonably in protecting its interests, in order for the causal connection to be established (Henville v Walker (2001) 206 CLR 459). The qualification to this is that, by s 137B of the Competition and Consumer Act, reduction may be made to a person's award of damages (relevantly for a claim of economic loss) for loss suffered partly as a result of the claimant's own failure to take reasonable care. Tarun did not advert to this provision in his Defence, or seek reduction of any damages awarded to the plaintiff on this account.
Fifthly, the test for causation is subjective. In Campbell, French CJ said (at [28]): "Determination of the causation of loss or damage may require account to be taken of subjective factors relating to a particular person's reaction to conduct found to be misleading or deceptive or likely to mislead or deceive. A misstatement of fact may be misleading or deceptive in the sense that it would have a tendency to lead anyone into error. However, it may be disbelieved by its addressee. In that event misstatement would not ordinarily be causative of any loss or damage flowing from the subsequent conduct of the addressee."
Sixthly, following on from the last point, Tarun plainly relies upon the effect of an 'entire agreement clause' in the distributorship agreement. As to the relevance of such clauses on the causation question, in Campbell, French CJ said in (at [29]-[31]): "A person accused of engaging in misleading or deceptive conduct may claim that its effects were negated by … a subsequent disclaimer of reliance by the person allegedly affected by the conduct … A subsequent declaration of non-reliance by a person said to have been affected by the conduct is more likely to be relevant to the question of causation. … Where the impugned conduct comprises allegedly misleading pre-contractual representations, a contractual disclaimer of reliance will ordinarily be considered in relation to the question of causation. For if a person expressly declares in a contractual document that he or she did not rely upon pre-contractual representations, that declaration may, according to the circumstances, the evidence of non-reliance and of the want of a causal link between the impugned conduct and the loss or damage flowing from entry into the contract. In many cases, such a provision will not be taken to evidence a break in the causal link between misleading or deceptive conduct and loss. The person making the declaration may nevertheless be found to have been actuated by misrepresentations into entering the contract. The question is not one of law, but of fact." (emphasis supplied)
Seventhly, there is the authority of Rosenberg v Percival (endorsed later by the plurality in Campbell at [146]) (see paragraph 234 below) about the weight that can be ascribed to statements of subjective understanding and intention by an injured claimant, after the event. This explains why, on causation matters in another context, statements after the event of harm as to what a claimant would have done is inadmissible; unless they constitute admissions (s 5D(3)(b) of the Civil Liability Act 2002 (NSW).

[50]

General matters relating to proof of misleading conduct

Where a case is based upon a verbal representation, it is pertinent to recall the well-known cautionary words of McLelland CJ (in Eq) in Watson v Foxman (2000) 49 NSWLR 315 at 318-319: "Where the conduct is the speaking of words in the course of the conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that they were in fact misleading in the proved circumstances. In many cases (but not all) the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seemed to be relatively subtle nuances flowing from the use of one word, phrase or grammatical construction rather than another, or the presence or absence of some qualifying word or phrase, or condition. Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions of self-interest as well is conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience." (emphasis supplied).
It has been said, in reference to the doctrine of promissory (equitable) estoppel, there is a need for the posited representation to be clear and unequivocal (Foran v Wight (1989) 168 CLR 385 at 410-11; Meagher Gummow & Lehane's Equity: Doctrines and Remedies, (5th ed) [17-265]). That observation, in my view, applies to consideration of whether pre-contractual verbal representations are misleading or deceptive for the statutory action relied upon here.
Thirdly, in a case based upon loss arising from a verbal representation, the Court must be very careful to scrutinise assertions of what was said, and done, and why parties acted as they did, in what Gleeson CJ described as the "prism of hindsight" (Rosenberg v Percival (2001) 205 CLR 434 at 441 [16]).
Fourthly, and this observation is made with particular reference to the 'guarantee representation' case, one of the matters that is relevant for the court to take into account in weighing the probabilities (per s 140 of the Evidence Act 1995 (NSW)) is the 'inherent unlikelihood of an occurrence of a given description' [26] .

[51]

The pleaded representations

Three representations were alleged to have been made by Tarun to Jeeth. All were alleged to be oral.
Jeeth submits that a primary reason for accepting that they were made was that he, and Ms Khabiya were witnesses of credit; whereas Tarun's denials of making representations should be disbelieved since he was not a witness of credit. The first point was partly developed by emphasising that since the plaintiff was inexperienced, the events of 2015 were likely to have stuck in his memory (or at least, by implication, more than they would have in the first defendant's memory). The last point was developed by reference to Tarun having disingenuously sought to minimise his true association and involvement with Opticure at various points in the evidence.
The first verbal representation was that the printing machines manufactured by Opticure were "the highest quality".
The second verbal representation was that Tarun and Opticure would provide all after sales services, as required.
Both of the first and second verbal representations were said to have been conveyed by Tarun at his meeting(s) with Jeeth in Melbourne on 21 and 22 May 2015 and previously in Jeeth's telephone conversation with Tarun earlier that month.
In my view, it is unnecessary to consider the second of these verbal representations. That is because, whether or not it was made, Jeeth did not attempt to establish that, even if was untrue (or, perhaps more accurately even if a promissory representation to that effect was not fulfilled), any failure to supply after sales service caused it loss or damage.
The third verbal representation (alternative to a claim on a contract of guarantee, which I have rejected above) was that if Jeeth entered into an agreement with Opticure to purchase wall printing machines and related products, Tarun would be personally liable for any losses suffered as a result of Jeeth entering into such agreement. This representation was said to have been conveyed at Jeeth's meeting with Tarun in Melbourne

[52]

The 'highest quality' representation

In my view, assuming that this representation was made - and I am satisfied that it is more likely than not that it was conveyed by Tarun - it did not amount to an actionable representation even if, as later occurred, the wall printing machines turned out to be defective.
Rather, I consider that the statement was in the nature of 'puffery', and was precisely the sort of thing that a reasonable person in Jeeth's position might expect would be said by a sales representative in Tarun's position. In this respect, it is not necessary, for this purpose, to descend to identifying, along any posited continuum, the differences lay between a product of 'good' quality, as distinct from 'high' quality. If it is not, contrary to what I have found, in the nature of 'puffery', the statement is inherently vague, as to what the 'quality' relates to: is it the eventual outcome, in terms of presentation of the image on a wall? Is it in relation to efficiency - how long the machines will take to generate the image on a wall? It is probable that other possible permutations may arise as well.
In his closing address, Counsel for the plaintiff submitted that the expression highest quality meant the 'most reliable outcome' from the use of the machinery. But that is only one potential possibility and was an implied one at that and should have been pleaded as an implied representation. It is not a implication that obviously arises as the only meaning of the expression and it was not fair to expect the first defendant to surmise or tease out what was meant in an ambiguous and vaguely articulated representation. In other words the context of this representation was too equivocal or ambiguous to be actionable.
It is relevant, in this context, to take into account Jeeth's position. Having been inspired, it appears, from what he saw on a popular television show, Jeeth, who generally struck me as a meticulous person, had already made his own inquiries (over the Internet) of Zeescape's product - apparently an actual or potential competitor to Opticure's product. This is not to say that Jeeth's knowledge of the product he was interested in acquiring was comparable to that of Tarun. But it also cannot be said that Jeeth had not done a certain amount of 'homework' himself. When he made his initial phone calls in April or May, he was not doing so as a retail customer on a mere whim. He was dealing with Tarun with a view to entering prospectively into a commercial arrangement. Further, and however much the connection between Tarun and Opticure might have been obscured, at this point (prior to purchase), it was already apparent, through Tarun's reference to him, that Tarun's brother, was involved. To the reasonable person in Jeeth's position, it appeared the manufacturer was a family operation. In these particular circumstances, it could not have surprised Jeeth if Tarun would warmly extoll the quality of the product.
Alternatively, what Tarun said about the highest quality of the machine could be taken to constitute his 'opinion'. I would also be prepared to infer that there was an implied representation that he genuinely held this opinion. It was not seriously suggested that he did not. I am not persuaded that the circumstances were such that there was an implied representation that he had reasonable grounds for such opinion. Tarun was a sales representative. The context in which he made the statement, particularly the other (general) things which Jeeth and Ms Khabiya attributed to him at the time that this particular statement was made, plainly did not indicate that he was a technical expert. He appeared, to all intents and purposes, to be a salesperson and what he said, to a person (Jeeth) who appeared to want to enter into a commercial relationship, was 'sales talk'.
Counsel for the plaintiff submitted that the likelihood that this verbal representation was made was reinforced by the alleged circumstance that on 26 May 2015 - the date the distributorship agreement was entered into - the pleading received a colour brochure of the second defendant which, described its products as amounting to "unique and revolutionary technology". But in my opinion, this is quite a different (and unpleaded) representation, in substance to the representation that was pleaded. It suggests that there is a new product in the market; rather than an improvement on an existing product where there were products in a competitive market.
A further problem, as noted by Counsel for the first defendant, was the plaintiff's failure to establish that there was some printing machine of superior quality to that that was manufactured by the second defendant.
If I am wrong, however, I am not satisfied that the element of causation is made out. Prior to the time when he placed his order, in June 2015, Tarun had shown Jeeth, by way of demonstration, video clips of the operation of the machines. At this point, Jeeth deposed in his affidavit, he 'liked what (he) saw'. Leaving aside the impressions generated by what he saw, other matters were weighing upon Jeeth's deliberations as to whether to proceed with the purchase. This included the issue about whether a guarantee was provided (see below), whether Opticure was a reputable company (and whether Tarun himself was a person of some financial substance) and whether other security might be provided. At this stage, I consider that any real influence of as an original inducement - that the product was of the highest quality - had been spent.

[53]

Extra-territorial dimension?

In so far as the attempt is made to sheet home liability to Opticure for the first verbal representation made by Tarun, a question arises as to where the representation were made. To the extent that this representation can be imputed to her, a consequential issue may be whether "Opticure," a foreign national, can be liable under the Australian Consumer Law.
I have indicated that if, contrary to what I have found, the 'highest quality' representation was made and caused loss, Opticure (the trading name of a foreign national) is, along with Tarun, also prima facie liable to Jeeth under s 139C Competition and Consumer Act).
The particulars of the representation show, however, that the conduct of Tarun was partly engaged in whilst he was in India (the April - May 2015 telephone conversations to Jeeth, then in Western Australia) and partly engaged in by him in Melbourne on 21-22 May. However, nothing turns upon the distinction between the places that these alternatives, since any representations by Tarun during a telephone conversation with Jeeth in Australia, whilst the former, was in India, were directed to a person in Australia in the course of a prospective transaction for the sale of goods in Australia. In my view, that establishes that Tarun was engaging in conduct in Australia for the purposes of the Competition and Consumer Act 2010 (Cth) [27] .
Although 'Opticure' is, in fact, a foreign national, given that her liability is derivative, in the sense that it is the liability of a principal for the conduct of an agent, to the extent that Tarun's conduct occurred inside Australia, there is no question about the extra-territorial operation of the Australian Consumer Law.
Further, in my opinion, and if it was necessary to so find, s 6 of the Competition and Consumer Act 2010 (Cth) is of sufficient breadth as to permit a finding that each of Tarun, and Opticure, could have been liable for damages for any misleading conduct as a result of the making of this first verbal representation.

[54]

The guarantee representation

Jeeth's case is that the guarantee representation was made on 22 May 2015 and also on 3 June 2015. In substance, the oral representation was in the same terms in each case.
I am not satisfied that Jeeth has made out his case against Tarun in relation to this representation on the balance of probabilities.
In this, contrary to the submissions for the plaintiff, I am not persuaded that the decisive question is whether Mr Tarun was more credible as a witness than Jeeth and Ms Khabiya (or vice versa). The alleged representation was made many years ago, was the subject of evidence from self-interested litigants. The safest recourse is to consider the matter from the point of view of the objective circumstances arising at the time [28] .
First, and to begin with, I regard it as inherently unlikely that Tarun would make a personal guarantee about matters of which he had no effective control should Jeeth decide to acquire the printing machines. Those machines may have been defective for multiple causes, including technical ones; many of which would appear to be beyond Tarun's technical expertise.
I do not accept the case theory advanced on behalf of Jeeth, that Tarun was so desperate to obtain some personal financial benefit, by way of commission or otherwise, arising from the sale of the printing machines as to motivate him to give an undertaking of this magnitude. Indeed, in this regard, no real attempt was made to falsify, by means of documentation or other evidence, Tarun's evidence that he did not, in fact, stand to obtain any special financial benefit. Nor does it strike me as plausible: a rationally-minded person in Tarun's position would likely have reasoned that if he attempted to 'dud' an Australian purchaser with inducements of this kind, it could seriously damage Opticure's reputation within the Australian market, which Opticure was trying to build, if it came to light.
Secondly, I would have expected an undertaking of this kind to have been documented in an agreement. It is true that, at one point, there was a reference to a personal undertaking expressed by Tarun in Jeeth's initial draft of a Memorandum of Understanding. But that version was not the version which appeared as Schedule D to the Distributorship Agreement; which made no reference to any personal undertaking by Tarun at all. The 'entire agreement' clause in the distributorship agreement is a powerful indicative factor suggesting that it was not the intention of the parties relying upon an earlier iteration of a memorandum of understanding not incorporated in the agreement.
At any rate, and contrary to Jeeth's evidence, I find that Tarun's email of 23 May 2015, by which he acknowledged receipt of a cheque, did not amount to Tarun's acceptance of Jeeth's version of a Memorandum of Understanding; irrespective of how Jeeth may have interpreted the message within it. Tarun's email. At its highest, his message was that he would be liable to refund the cheque for $22,500 "if the deal doesn't go through". The message said nothing about the consequences if the deal did go through, but Jeeth was dissatisfied with the products.
Thirdly, on its face, even Jeeth's version of the 'memorandum of understanding' did not clearly evince any undertaking by Tarun to be personally responsible for all of Jeeth's losses should he enter into an agreement with Opticure. In this regard, the context, here, is a document prepared at a meeting in Melbourne on 21-22 May. The document itself was expressed, on its face, to be Jeeth's "preliminary" offer to Opticure (point 1), with a 'preliminary' order to be placed (point 2). The document not only contemplated that a 'final legal agreement' (assuming this 'offer' was accepted) was to be entered (point 10), but the agreed term for the distributorship agreement (point 11) had not been fixed. If there was to be any disagreement about the operation of the 'agreement', the whole agreement would need to be negotiated (point 12).
On the matter of payments, this memorandum of understanding referred to a '50% Advance payment' (point 3) for '22 June 2015' (which, the evidence revealed, was an erroneous reference to 22 May 2015 (point 8). When considered with points 3 & 8, in my view, the reference in point 14 to Tarun being "personally liable for this payments" is a reference to his being only personal liable for the 50% Advance Payment, ie $22,500, if this version of the Memorandum of Understanding was accepted.
As a further matter, and if it was necessary, I would not have construed point 14 as giving rise to a prospective liability of the kind contended for by Jeeth. Grammatically, the clause is inapt. As a final recourse, I would have found that any prospective obligation in cl 14 would operate 'strictly' against Jeeth [29] , so as to be limited to a guarantee only to return the cheque of $22,500 if no distributorship agreement had been entered into.
At any rate, I have already found that Jeeth's version of the memorandum of understanding was not accepted by Tarun.
Further, also, I am not persuaded as to the contemporaneity, or general reliability, of the undated typed note which appeared to have been created on Jeeth's mobile telephone, and which Jeeth relied upon at trial [30] . The only evidence for when the document was generated was that it had been generated, or modified, more than two years before Jeeth gave testimonial evidence. When Jeeth was giving evidence, the relevant event had occurred more than four years before. The content of the note was not reproduced in an email, or other correspondence which could have been put to Tarun. It could have been generated at any time, including at about the time in November 2018 when Jeeth was preparing his affidavit.
It is common ground that, leaving aside the matter of Jeeth's version of the memorandum of understanding, and the undated typed note, there is no documentary evidence of any guarantee representation.
As a final observation on this point, Counsel for the first defendant said that in the absence of a guarantee in writing, there may be constitutional questions as to whether the Fair Trading Act (Vic), by its incorporation of the provisions of the Australian Consumer Law, might supersede, if not impliedly repeal the Victorian legislative requirement for guarantees in writing. This point was only raised in a response to a question by me during Counsel's closing address; had not been preceded by any Judiciary Act notice and for the reasons I have already articulated, this point need not be considered any further.
Fourthly, the conclusion at paragraph [267] is important in a context where I have already expressed my doubts upon Jeeth's credibility. Incorporated within this was a view that Jeeth did not have a strong memory - I reiterate that his evidence featured answers that he "did not remember" many matters. To this, I add that when he did give testimonial evidence, he was describing events that had occurred well over four years before. For that matter, the affidavit upon which he was cross-examined had been prepared well over three years after the events that he had deposed to had occurred; when it could hardly be said that the events were fresh in his mind. It may fairly be said that the same points concerning the lapse of time might be made against Tarun, but it is Jeeth's case to prove that this verbal guarantee representation was made.
I also recognise that Ms Khabiya purported to give corroborative evidence of Jeeth's account of what Tarun said and, as I have noted, she gave her evidence sincerely. Nevertheless, I am particularly mindful of the observations of McClelland CJ (in Eq) in Watson v Foxman, and find that although she was sincerely convinced in her recollection that Tarun had personally undertaken to be liable for all losses generated by the purchase of products that later turned out to be defective, she is mistaken in her recollection. There was too much ambiguity in what Tarun had said on that subject matter, all those years ago, for her to have formed an accurate and reliable recollection of such a sufficiently clear statement by Tarun so as to amount to a representation.
Fifthly, I am mindful that there was no contemporaneous complaint to Tarun about his having made a guarantee representation. It was not referred to on 23 June 2015 and 18 August 2015, prior to receipt of the defective products, when Jeeth's lawyers separately wrote to Tarun. I infer that those lawyers would have been instructed by Jeeth about the existence of any personal guarantee representation by Tarun had that occurred, since this would have facilitated a potentially easier path to recovery for Jeeth to recover compensation (and, more especially, the more effective enforcement of any order for compensation) then making a claim against a foreign national. I also infer that if such information was not volunteered by Jeeth, a reasonably competent legal practitioner in the position of this firm would have sought instructions of all agreements or representations made by Tarun.
What was curious was that, leaving aside the involvement of lawyers, notwithstanding the accounts given by Jeeth (and Ms Khabiya), in their respective affidavits, about the difficulties they experience with operating the two machines after they had received them, Jeeth never appeared himself to directly remind Tarun of his undertaking in writing; nor instructed Jeeth's lawyers to demand payment for the losses arising from the operation of the machines. It appears that his complaint was made, for the first time, in the pleading, when he commenced this proceeding. In my view, that is not conduct consistent with a firm belief or conviction in this particular claim.
For these reasons, I find that the guarantee representation case is not made out.
The claims for misleading and deceptive conduct (s 18), and false or misleading statements (s 29) fail.

[57]

SUMMARY & ORDERS

For the foregoing reasons I find that: 1. The Plaintiff has made out its case that the Second Defendant is in breach of contract, specifically, for breach of its warranty of merchantable quality. 2. The plaintiff is entitled to recover damages for breach of contract in the sum of $92,000, together with pre-judgment interest. 3. The plaintiff has failed in his claims of statutory misleading or deceptive conduct, or false or misleading statements, against the First and/or Second Defendants, under ss 18 and 29 of the Australian Consumer Law, respectively. 4. The plaintiff has also failed in his of claims of a breach of a contract of guarantee and (in the alternative) conventional estoppel against the First Defendant.
Within 15 days of these reasons, the Plaintiff is to supply short minutes of order to reflect these reasons for judgment, in accordance with a timetable whereby: 1. The plaintiff is to serve proposed short minutes upon the first defendant within 5 days of these reasons; 2. Within a further 5 days (after (i)), the first defendant is to: 1. notify the second defendant of these reasons (by reference to the internet link www.caselaw.nsw.gov.au), or alternatively, by supplying her with a hard copy of these reasons, or some such other means as the first defendant regards as expedient for the said notice. 2. prepare and serve an affidavit deposing to his attempts to notify the second defendant of these reasons; as well as any acknowledgment of receipt from the second defendant and (where appropriate) the means by which the second defendant received such notice; 3. notify the plaintiff's solicitor (by written correspondence) of any points of disagreement with the plaintiff's proposed short minutes and reasons for such disagreement; 1. Within a further 2 days (after (ii)), the second defendant is to serve upon the plaintiff's solicitor a version of short minutes that she contends should be made and state reasons for disagreement with the plaintiff's version. 2. Within a further 3 days (after (iii)), the plaintiff is to send to my Associate all documents referred to in steps (i)-(iii) inclusive.
The short minutes should make provision for pre-judgment interest and costs; as well as liberty to apply on 2 days' notice.
Absent any indication to the contrary, final orders will be made on the papers.

[58]

Endnotes

The solicitors were from a Victorian firm and they were unable or unwilling to arrange to file this document themselves. The Court granted leave to file it in Court.
Ex 1 (Vol 2, p 303).
Ex 1, Vol 2, p 299
The spreadsheet appeared at Ex 1, Vol 2, p 545
Coal Cliff Collieries Ltd v Sijehama Pty Ltd (1991) 24 NSWLR 1; also United Group Rail Services Ltd v Rail Corporation New South Wales (2009) 74 NSWLR 618
Heimann v The Commonwealth (1938) SR (NSW) 691 at 695.
Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226; Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 423
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 282-3
Beaton v Moore Acceptance Corp Pty Ltd (1959) 104 CLR 107 at 122.
Bellgrove v Eldridge (1954) 90 CLR 613. As to whether such costs would be "reasonable", see also Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272 at [17]-[18].
TC Industrial Plant Pty Ltd v Robert's Queensland Pty Ltd (1963) 37 ALJR 289
Commonwealth of Australia v Amann Aviation Ltd (1991) 174 CLR 64 at 80
Statute of Frauds 1677 (Imp), s 4, as affected by the Instruments Act 1958 (Vic), s 126
ACCC v TPG Internet Pty Ltd (2013) 250 CLR 640
Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45 at [108]
Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 at [37]; Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at [26], [102], [114]; The Real Thing Supplements CC v Media Tag Pty Ltd [2018] NSWCA 318; 364 ALR 712 at [51]-[53]
Campbell v Backoffice Investments at [33]; Forrest v ASIC [2012] HCA 39 at [102]-103]
Smith v Land and House Property Corp (1884) 28 Ch D 7
General Newspapers Pty Ltd v Telstra Corp (1993) 45 FCR 164; and Petty v Penfold Wines Pty Ltd (1994) 49 FCR 282
Magennis v Fallon (1828) LR 2 Ir 167
This case was also run against the Third Defendant, until the claim against the Third Defendant was struck out.
Houghton v Arms (2006) 225 CLR 553 at 565-568
Fair Trading Act 1999 (Vic)
Rozenblit v Vainer & Anor (No.2) [2015] VSC 234
Heydon v NRMA Ltd (2000) 51 NSWLR 1 at [339]-340]
Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-2, applied under the applicable statutory evidence regime in Qantas Airways Ltd v Gama (2008) 167 FCR 537
Similar circumstances sufficed to establish the connection with Australia in ACCC v Valve Corporation (No.3) [2016] FCA 196 at [170]-[188] (not disturbed on appeal: ACCC v Valve Corporation [2017] FCAFC 224)
Fox v Percy (2003) 214 CLR 118 at 129
Ankar Pty Ltd v National Westminster Finance (Aust) Pty Ltd (1987) 162 CLR 549 at 561-2
Ex 1, Vol 2, p 299
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 per Deane J at 446
K.R Handley, 'Exploring New and Old Ideas about Estoppel and Election' (2019) 93 ALJ 594 at 596. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 August 2019

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