Walker v Sell

Date of hearing: 22 July 2016

Date of last submissions: 4 August 2016

Registry: New South Wales

Division: General Division

National Practice Area: Commercial and Corporations

Sub-area: Regulator and Consumer Protection

Category: Catchwords

Number of paragraphs: 138

Counsel for the Appellant and Cross-Respondent: Mr J Emmett

Solicitor for the Appellant and Cross-Respondent: Harris & Company

Solicitor for the Respondent and Cross-Appellant: Mr S Chandrasegaran, Albury Legal Pty Ltd

AND BETWEEN: GLEN SELL Cross-Appellant

AND: LYLE WALKER Cross-Respondent

JUDGE: BROMWICH J DATE OF ORDER: 27 OCTOBER 2016

1. The appeal be dismissed with costs.
2. The respondent/cross-appellant's interlocutory application be dismissed with costs.
3. The cross-appeal be dismissed with costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

BROMWICH J: 1 This is an appeal from orders made by a judge of the Federal Circuit Court of Australia on 3 March 2016, by which his Honour dismissed an application supported by a statement of claim and reserved the quantification of costs to be paid by the applicant to the respondent. This is also a cross-appeal by the successful respondent in the Court below against the limited quantum of costs ultimately awarded to him on 7 April 2016, being party-party costs in the sum of $14,162.17, together with an interlocutory application by the respondent/cross-appellant to adduce additional evidence on the costs cross-appeal. 2 The main controversy in these proceedings concerns the question of who should bear the loss on the sale of a collectable motor vehicle which was later found not to be the particular model that both the vendor and purchaser had believed it to be. It was common ground that the car was not worth the purchase price paid. That is, the issue to be resolved was who, as a matter of contract law or statute, should bear the risk of the car not being genuine. The primary judge found in favour of the vendor. For the reasons that follow, the appeal must be dismissed with costs. 3 Because the appeal must be dismissed, the respondent's cross-appeal on costs and the related interlocutory application to adduce further evidence in aid of that cross-appeal had to be determined. For the reasons that follow, both the cross-appeal and interlocutory application must be dismissed with costs.

Overview 4 On or about 21 August 2013, the appellant purchaser, Mr Lyle Walker, entered into a contract with the respondent vendor, Mr Glen Sell, to buy a car for $135,000. A deposit of $10,000 was paid on that day, with the balance to be paid over the following eight months. The car remained with Mr Sell until the final payment was made by Mr Walker. In the result, that period was extended until just under 12 months, at which time the final payment was made and the car was picked up by Mr Walker. 5 It was the common belief of Mr Walker and Mr Sell that the car was a genuine 1970 GTHO model Ford Falcon Sedan, but with a different engine block and different colour (the car being changed from the original blue to red). That common belief of genuineness proved to be wrong. A week after taking possession of the car, Mr Walker arranged for it to be inspected with a view to having it restored. The car was put on a hoist and the person inspecting it, self-described as not an expert on such cars, apparently immediately said that it was not genuine because there were about 20 things that he could already see were not correct. 6 Mr Sell honestly believed that the car was in fact a genuine 1970 Ford GTHO Falcon Sedan because as a part of his divorce settlement several years earlier his ex-wife insisted on the car being valued. She chose the valuer. The valuation obtained at that time incorrectly confirmed its identity, albeit upon the rather unsatisfactory basis of simply taking at face value the affixed vehicle identification number (VIN) plate and a letter from Ford confirming identity upon that basis of only that VIN. As part of the divorce settlement, Mr Sell sold his house and paid his ex-wife $48,000. A live issue at trial and on appeal was whether the description of the car provided by Mr Sell was conveyed as being only his belief or not. 7 Immediately after Mr Walker discovered that the car was not in fact a 1970 Ford GTHO Falcon Sedan, he rang Mr Sell to let him know that the car was not genuine and subsequently sought a refund. When that was not successful he commenced proceedings in the Federal Circuit Court of Australia. 8 It was agreed between the parties that rather than the car being a 1970 Ford GTHO Falcon Sedan, it was a different model Ford Falcon with a lesser market value of $25,000, leaving a loss of $110,000 to be incurred by either Mr Sell or Mr Walker. It apparently was not in doubt that both parties were innocent victims of a fraud perpetrated by someone on Mr Sell when he bought the car some 30 years ago from a Mr Paul Ward. It is not possible to say who was responsible for that fraud.

In the Federal Circuit Court 9 The proceedings in the Federal Circuit Court were commenced by an application and statement of claim. The case as pleaded: (1) relied upon an express term of the contract that the car was "an original 1970 XW GTHO Ford Falcon"; (2) alternatively or additionally pleaded an implied term of the contract that the car would correspond with the description by which it was sold pursuant to s 18 of the Goods Act 1958 (Vic) or the corresponding provision in the Sale of Goods Act 1923 (NSW); and (3) relied on either the express or implied term having been breached as the car was not in fact an original 1970 XW GTHO Ford Falcon. 10 It is common ground that the sale in fact took place wholly in Victoria and accordingly it was the Victorian Goods Act and not the NSW Sale of Goods Act that applied. Although the primary judge erroneously referred to the Sale of Goods Act, nothing turns on that error. 11 Sections 18 and 61 of the Goods Act provided as follows: 18 Sale by description When there is a contract for the sale of goods by description there is an implied condition that the goods shall correspond with the description; and if the sale be by sample as well as by description it is not sufficient that the bulk of the goods corresponds with the sample if the goods do not also correspond with the description. 61 Exclusion of implied terms and conditions Where any right duty or liability would arise under a contract of sale by implication of law it may be negatived or varied by express agreement or by the course of dealing between the parties or by usage if the usage be such as to bind both parties to the contract. 12 As detailed below, the cases dealing with sale by description provisions such as s 18 of the Goods Act and equivalent provisions in Australia and the United Kingdom have produced diverse results. This is largely as a result of factual differences, but also arising from nuanced differences in legal interpretation of the effect of the statutory departure from common law principles of caveat emptor (let the buyer beware) in favour, to some degree, of caveat venditor (let the seller beware). 13 The defence pleaded by Mr Sell in the Court below essentially asserted that the reference to the car in the documents signed on 21 August 2013 was no more than a general description and that no more had been represented than a belief on the part of Mr Sell that the car matched the description given. In particular, [13(iii)] of the defence stated "The Respondent made it clear to the Applicant that any statements he made about the Vehicle were made to the best of his knowledge and belief". 14 Mr Walker's case in the alternative was that there had been misleading or deceptive conduct in trade or commerce contrary to s 18 of what was referred to as the Australian Consumer Law. For the reasons discussed below, the correct description was the Australian Consumer Law (Victoria). Mr Sell pleaded that the transaction was not "in trade or commerce" so that s 18 did not apply. This was important, because this claim was the means by which federal jurisdiction was purportedly engaged, giving the Court below and this Court jurisdiction to entertain Mr Walker's claim. 15 As detailed below, the jurisdictional issue concerning "trade or commerce" was not just the subject of pleadings, but was expressly identified in writing by the parties in the Court below as an issue to be determined. However, this express issue was not addressed. It was not even mentioned in the reasons of the Court below beyond stating (incorrectly as it turns out) at [1] that the application was "within the Court's jurisdiction under s. 138A of the Australian Consumer Law". Instead of grappling with the jurisdictional issue raised, the claim was dismissed on a factual basis. 16 The factual resolution of an issue raising jurisdictional questions will not suffice if might affect the capacity of a federal court to entertain a case at all. Failure on the part of the primary judge to address the jurisdictional question squarely raised in this case was unsatisfactory. That is not just because the factual conclusion reached is at least questionable and no satisfactory reasoning explains how it was arrived at. More importantly, such jurisdictional issues, once raised, must be determined in federal courts as a threshold issue, especially if, as in this case, that is the only way in which the jurisdiction of the Court below (and this Court) was engaged. The proper determination of a question of jurisdiction may result in a federal court being unable to entertain and adjudicate upon the proceedings at all, including the balance of the claims otherwise beyond jurisdiction. This issue of jurisdiction is addressed below. 17 In the proceedings before the primary judge a statement of agreed facts and issues was filed in the following terms: Agreed Facts 1. In or about August 2013, the Respondent advertised for sale on the Gumtree website a vehicle described as a '1970 Ford GTHO Falcon Sedan' (the Vehicle). 2. On about 21 August 2013, the Respondent made representations to the Applicant to the effect that the Vehicle was a 1970 Ford GTHO Falcon Sedan, with the exception of the Vehicle's engine block and colour. 3. On about 21 August 2013, the Applicant inspected the vehicle at the Respondent's home and agreed to purchase the Vehicle from the Respondent for $135,000. 4. During the inspection, the Respondent provided the Applicant with a letter from Ford Motor Company that purportedly described the Vehicle as a Ford XW GT HO Sedan. 5. The Applicant and Respondent signed a written document recording the sale on about 21 August 2013. This document described the Vehicle as a 'GTHO 1970'. 6. The Applicant paid the purchase price to the [Respondent] over the course of the next 12 months. 7. The Applicant did not have the Vehicle inspected by an expert at any time before he took possession of the Vehicle. 8. The Applicant took possession of the Vehicle in August 2014. 9. The Vehicle is not a 1970 Ford GTHO Falcon Sedan. Its current market value is $25,000. Agreed Issues 1. Whether the contract of sale has implied into it a term that the vehicle must conform to its description. 2. Whether the Respondent made an oral representation to the Applicant that the Respondent's description of the Vehicle was only made to the best of the Respondent's knowledge and whether, if such a representation was made, it will impact the Respondent's liability. 3. Whether it was a term of the Contract for sale of the Vehicle that the Applicant was to undertake his own investigations and due diligence into the Vehicle. 4. Whether the sale of the Vehicle arose in trade or commerce. 5. Whether the Federal Circuit Court has jurisdiction to hear the dispute. 18 It should be noted that while the above facts were agreed by the parties, and the hearing both at first instance and on appeal proceeded upon that basis, the formal requirements of s 191 of the Evidence Act 1995 (Cth) regarding agreement as to facts were not observed in that the agreement was not signed by either the parties or by their lawyers. Accordingly, the restriction on adducing evidence to contradict or qualify an agreed fact without leave contained in s 191(2)(b) did not apply, if indeed the agreed facts were properly binding in any event. 19 As it turned out, the only material sense in which the agreed facts were disputed and sought to be qualified by the evidence before the primary judge and agitated on appeal in this Court was that paragraph 2 of the agreed facts, reproduced above, which acknowledges representations to the effect that the car was a 1970 Ford GTHO Falcon Sedan, was sought to be qualified by Mr Sell to the effect that this was a representation to the best of his knowledge, rather than an absolute representation as to that being the fact. This qualification assumed some importance because it went to the question of reliance, and was consistent with the defence already pleaded, as outlined above. 20 The hearing before the primary judge took place on 3 March 2016. Both Mr Walker and Mr Sell gave evidence and each was subject to cross-examination. His Honour delivered a very short ex tempore judgment the same day. That judgment provides little in the way of factual or legal analysis, effectively leaving that to be done for the first time on appeal. His Honour did, however, make some important factual and credit findings, albeit expressed in the form of conclusions rather than reasons, for which he had the advantage of viewing the witnesses, and in particular the two parties in cross-examination. Those conclusions are set out after a summary of the evidence below, in order to understand better what his Honour was referring to. 21 The primary judge dismissed Mr Walker's application with costs (the quantum of which was the subject of the present cross-appeal by Mr Sell). In relation to Mr Walker's case that this was a sale by description, the primary judge concluded that Mr Walker had made his own decision as to whether to purchase the car based on his own inspection, which his Honour found was not reasonable. His Honour therefore found there was no breach of contract by Mr Sell. 22 In relation to the case of misleading or deceptive conduct, the primary judge found that Mr Walker relied upon his own erroneous assessment as to the genuineness of the car and that any reliance by him upon any representation by Mr Sell was not reasonable. Accordingly, his Honour found that no contravention of s 18 of the Australian Consumer Law was made out. 23 In a separate and subsequent judgment on the quantum of costs, the primary judge ordered Mr Walker to pay Mr Sell's costs fixed in the sum of $14,162.17, being what his Honour determined to be party-party costs and disbursements as a subset of the full costs and disbursements incurred of $39,386.60, which was sought to be the subject of an indemnity costs order. 24 As noted above, that costs order was the subject of a cross-appeal by Mr Sell and a related interlocutory application seeking to adduce fresh evidence on appeal, being a Calderbank letter (or, in the alternative, a notice of offer of compromise) dated 1 July 2015, a notice of offer to compromise dated 30 July 2015 and copies of various invoices and receipts as to the incurring of various costs and disbursements.

Proceedings in this Court 25 On 23 March 2016, Mr Walker filed a notice of appeal. On 20 April 2016, that was replaced by a supplementary notice of appeal, which was the document upon which the appeal was ultimately heard, the grounds being as follows: 1. His Honour erred in holding that the sale that was the subject of the proceedings below was not a sale by description. 2. His Honour erred in finding that the Appellant did not rely on any representations made by the Respondent. 3. His Honour erred in finding, if he did so find that any reliance on the representations made by the Respondent was not reasonable. 4. His Honour's finding that a reasonable inspection by the Appellant would have discovered that the vehicle was not, in fact, a 1970 Ford GTHO Falcon Sedan was not supported by the evidence. 5. His Honour did not determine the Appellant's claim for breach of an express term of the Contract. 26 Appeals to this Court are by way of a rehearing: Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833; (2001) 117 FCR 424 at 434 [20]. An appeal by way of rehearing requires this Court to decide the case for itself as to both facts and law and give effect to its own judgment: Warren v Combes (1979) 142 CLR 531 at 552.5. However, that does not alter the need to find error on appeal before intervening: Branir at 435 [21]. In practice, the application of these principles will usually entail accepting the findings of the trial judge, especially factual findings, including as to the reliability and credit of witnesses and the weight that should be given to competing evidence, unless shown to be wrong: Cabal v United Mexican States [2001] FCA 427; (2001) 108 FCR 311 at 362 [223]-[224], quoted with approval in Branir at 435 [23]. 27 In this case, I can see no reason why I should not accept and apply the credit and reliability findings of the primary judge as summarised below. His Honour had the advantage of seeing the parties give evidence in cross-examination and thereby in deciding which account should be preferred at points of conflict. In any event, many of the key findings do not turn on resolving any such conflict. Further, the paucity of reasoning by the primary judge gives me a relatively free hand in deciding what to make of the evidence before his Honour, applying the legal principles contained in the authorities discussed below.

Key evidence in the Court below 28 The critical evidence on the appeal goes to the question of whether there was a sale by description, as opposed to, for example, by inspection with a description to identify the specific car. A related question was whether, objectively rather than subjectively, there was reliance on the description that was provided. The evidence reproduced below needs to be considered in the context of the statement of agreed facts reproduced in part above. In these reasons I have largely avoided referring to, or relying upon, evidence which is disputed unless it goes directly to the issues in dispute. The ambit of relevant factual dispute, in the sense of making any difference to the outcome of the appeal, was in any event quite narrow. 29 The key documentary evidence was as follows: (1) A letter from Ford dated 9 August 1995, which acknowledged a letter from Mr Sell, which listed the serial prefix and serial numbers that must have been provided by Mr Sell from the VIN plate and advised, on its face upon that basis alone, that the car was originally built in 1970 as a Falcon GT model 18939 XW GT HO Sedan, along with certain other details, including the original blue colour. (2) A 21 August 2013 contract signed by the parties which included these sentences "I Glen Sell will state that I will hold said vehicle GTHO 1970 Vin: JG33KP16488 for a period of 8 months maximum. Final payment to be made no later than 21st Day April 2014", and acknowledged payment of a $10,000 deposit that day. (3) A subsequent version of the same 21 August 2013 document with additional text recording: (a) the initial $10,000 deposit payment; (b) four subsequent payments between 4 September 2013 and 12 April 2014 totalling a further $85,000, leaving a balance of $40,000 owing as of 12 April 2014; (c) an extension of time of four months to pay the remaining $40,000 and an extension of time of time of two months to pay an interest amount of $3,500; and (d) stating a balance paid of $40,000 plus an additional $1,280 for insurance and registration on 7 August 2014. (4) Two reports by a car expert, Mr Cuthbert. The first report was prepared well before the contract in this case was formed (being for the divorce proceedings between Mr Sell and his ex-wife) and concluded that the car was genuine. The second report was prepared for the purpose of these proceedings and stated that upon further inspection, the car was not genuine. 30 The key affidavit and oral evidence (in cross-examination) of Mr Walker and of Mr Sell going to the topics of sale by description or reliance is reproduced below. 31 In his affidavit sworn 20 November 2014, Mr Walker deposed to the following (as per original): 4. Shortly after I replied to the Advertisement, I had a telephone conversation with [Mr Sell] to the following effect: I said: 'what is the year and model of the car?' He said: 'it's a 1970 XW GTHO Falcon.' I said: 'can you tell me about it?' He said: 'its in very good condition. The only changes to it are the engine which blew several years ago and the colour. It was originally starlight blue but I repainted it track red a long time ago, no one wanted a blue muscle car back in the 1970s.' I said: 'I'd like to come and have a look at it.' He said: 'Ok, its in Wodonga.' … 8. I inspected the Vehicle for approximately 30 minutes. During this time, I had a conversation with [Mr Sell] to the following effect: I said: 'can you show me the Vehicle Identification Number on the shock tower, radiator support panel and compliance plate?' He said: 'yes, but you can't see the number on the shock tower very well, it was painted over when the car was resprayed from starlight blue to track red.' I observed that the VIN contained the serial prefix 'JG33', which I understand to be that which corresponds to a GT Falcon. I also observed that the VIN located on the compliance plate and radiator support panel was identical. While I could not clearly see the VIN on the shock tower, I could see that it contained the 'JG33' prefix. 9. I then had a further conversation with [Mr Sell] to the following effect: I said: 'why are you selling the car?' He said: 'I just had to pay my ex-wife a lot of money as part of a divorce settlement and I am looking to buy a house soon. I don't really want to sell the car but I need the money.' I said: 'How long have you owned the car?' He said: 'I bought it about 35 years ago. I've used it for personal use and weddings recently.' I said: 'Is it a Phase 2 GTHO?' He said: 'Yes, I have a Ford verification letter describing it as a Phase 2 with the relevant details. But, I'm led to believe that it is a Phase 2.5, because it has the bonnet of a Phase 3. This car is actually more rare than a Phase 2. It is one of only seven with this bonnet, it doesn't have bonnet pins like a phase 2.' I said: 'Do you have log books?' He said: 'No, they were lost a long time ago.' I said: 'Has the car ever been restored?' He said: 'No, apart from the new engine and respray to change the colour. Everything else is original.' I said: 'What happened to the original engine?' He said: 'It blew. The original engine was a D Block. You can pick up a D Block for about $3,500.' … 12. After about 5 minutes, I entered [Mr Sell's] house with Mr Naumovski and had a conversation with [Mr Sell] to the following effect: I said: 'Do you have the letter from Ford you mentioned earlier?' He said: 'Yes'. [Mr Sell] then handed me a letter on 'Ford' letterhead, as well as the certificate of registration for the Vehicle. The letter contained the same VIN as the certificate of registration and that which I had observed on the Vehicle. The letter stated that the VIN corresponded with a Phase 2 GTHO Falcon. 32 In his affidavit sworn 28 August 2015, Mr Sell deposed to the following: 8. The reasons for my belief in the genuineness of the car are as follows: (a) I trusted Mr Ward and did not doubt his word that the car was genuine when I bought it from him; (b) I made my own personal enquiries with the Ford Customer Assistance Centre and was provided with a letter from the Centre dated 9 August 1995 stating that the car was originally built in 1970 as a Falcon Gt with the Model Code 18939 XW GT HO Sedan; and, (c) When my marriage broke down in 2005, as part of my divorce property settlement, my former wife insisted on a full expert valuation being conducted of the car. The expert valuer (Mr Graeme Cuthbert of Melbourne) came to Wodonga and spent some hours inspecting the car before assessing it as a genuine GT HO Sedan and valuing it at $80,000.00. … 13. On a Wednesday or a Thursday, I received a telephone call from [Mr Walker] (who I had never known before). [Mr Walker] introduced himself to me. He then said, "I am interested in the GT. Is it an original?" I told him, "No, this is why it is going so cheap. If it was a complete original it would be selling for almost double the price. It is a genuine item but not original condition." He then asked me, "What is wrong with the GT?" I replied, "It does not have the original block or paint job. It is supposed to be Starlite Blue, not Track Red. When I bought the GT 30 years ago, this is how I got it and nothing has been changed. When I got the GT repainted I went back to red because I love red. I never intended on selling the car. The only reason I am now selling is because I lost my family home through a divorce and want to buy another house. This is the only way I can do it." 14. I told [Mr Walker] that I had a letter from the Vic Ford Motor company stating that the car was genuine. I also told [Mr Walker] I had a letter from Graham Cuthbert (a Melbourne expert car valuer) which also confirmed this. I told him Mr Cuthbert was chosen by my ex-wife's solicitor to value the car and I had no say in it. 15. I then told [Mr Walker] that to the best of my knowledge everything else was fine. He said, "That's okay" and that he would still like to come and look at the car. I told him no worries and just asked him to let me know when he would like to look at the car. … 21. When I returned to the garage, I lifted the car bonnet up to show [Mr Walker] what I said was true about the block. I also told him "I am not sure on the radiator support and there have been suggestions it is not right." I showed him damage caused by spilt brake fluid to the engine and engine bay, but he did not seem concerned about it. … 29. [Mr Walker] then told me that the only thing that he wants to do is to get his own valuation done before he pays the car off. He told me he has a friend in Sydney he can send down to look at it. I told [Mr Walker], "Lyle, that would not be a problem. The only thing is that I want to be here when your friend checks out the GT. No offence, but I don't trust anyone." … 34. At no point after 21 August 2013 did [Mr Walker] ask to make arrangements for any inspection of the car. 33 In his affidavit in reply sworn 17 September 2015, Mr Walker deposed to the following: 5. In relation to paragraph 8 of [Mr Sell's] Affidavit: (a) Prior to purchasing the Vehicle (as defined in my affidavit sworn 20 November 2014), [Mr Sell] did not disclose who he purchased the Vehicle from; (b) [Mr Sell] provided me with the letter referred to in paragraph 8(b) of his affidavit; and (c) [Mr Sell] did not give me a copy of any document from Mr Cuthbert, nor did he tell me that Mr Cuthbert valued the Vehicle in 2005 at $80,000. … 11. In relation to paragraph 21 of [Mr Sell's] Affidavit, I deny that [Mr Sell] has ever said to me 'I am not sure on the radiator support and there have been suggestions it is not right.' Had [Mr Sell] said this to me, I would not have purchased the Vehicle. This is because at the time, I was aware that the Vehicle Identification Number, which is critical to establishing the identity of a vehicle, was stamped on the radiator support panel. In relation to the final sentence of paragraph 21 of [Mr Sell's] Affidavit, I was not concerned about the stain on the engine from the brake fluid, as I intended to recondition the engine and restore the vehicle in any case. … 14. In relation to paragraph 29 of [Mr Sell's] Affidavit, I deny the conversation set out in that paragraph. As I had agreed to purchase the Vehicle for $135,000, I did not intend to have the Vehicle valued. I did, however, want to have the Vehicle restored, as described in paragraph 26 of my affidavit sworn 20 November 2014. 34 The relevant passages of Mr Walker's evidence in cross-examination by Mr Chandrasegaran, solicitor for Mr Sell, were as follows: MR CHANDRASEGARAN: In signing to buy the car, you signed to do so based on your personal inspection of the car on that occasion, didn't you? When you actually went to Wodonga, you saw the car. You had a look at it. According to your affidavit, you spent a fair amount of time looking at the car. And then you decided to buy it based on your personal inspection of the car; is that correct?---With my witness, that's correct. … MR CHANDRASEGARAN: After seeing the car, you offered to purchase it, in the end, for $135,000; is that correct?---Sorry, can you repeat the question? After inspecting the car on that one occasion in Wodonga - - - ?---Yes. You had made this decision to buy it for 135,000; is that correct?---That's correct. … MR CHANDRASEGARAN: … So when you say that you were relying on things that Mr Sell told you, that - about the car and that it was a genuine car - - -?---I did not say I was relying on what Mr Sell told me only. So what were you relying on?---I wanted to see, you know, the evidence of - that the car was genuine. I wanted to see his registration papers. I wanted to see his - you know, whether stampings were on the vehicle, the VIN - chassis number. All right?---I wanted to see reports - a letter from Ford. Yes. And when you asked for those things, did you see them?---Yes, I see them. Did Mr Sell show them to you?---He showed me to - them to me, except - - - Did he open the bonnet of the car so you could look at the VIN - the numbers?---He did. He did. I asked him about them. So you really weren't relying on Mr Sell's opinion about the genuineness of the car. You had made your - you were relying on your own observations, weren't you?---My own observation, as well as Mr Sell's - I wanted to hear about what he was talking to me - about the car, about - - - But $135,000 is a lot of money, isn't it?---Yes. And you had only just known Mr Sell. You hadn't had a long period of association with Mr Sell?---That's correct. So it would have been prudent for you to have got your own expert, independently, to come in to look at the car, wouldn't it?---Sorry, I don't understand what you - prudent - - - It would have been prudent - careful?---What does "prudent" mean, sorry? Sensible, prudent, careful - - -?---No. No?---No, not when I had all the VIN, chassis number and all that stuff before me, the rego papers, the letter from Ford. That, to me, would indicate that the car is genuine. And I spoke to Mr Sell about the car, and he told me that they were all genuine. He told you that they were all genuine?---He told me that the car, sorry, I - - - Sorry, he told you the car was genuine?---That's correct. Did he tell you that the car was genuine, to the best of his knowledge?---No. He did not say that. He never said that. That's incorrect. I put it to you that Mr Sell did say that to you, that - - -?---That's incorrect. He said, as far as he was aware, it was a genuine GTHO?---That's not correct. … MR CHANDRASEGARAN: … I suggest to you, Mr Walker, that you also told Mr Sell that you would get your - you had a friend in Sydney, and you would get that friend to come to Wodonga to inspect the car before you paid the car off. Do you recall saying that to Mr Sell?---Yes. I said that in the initial conversation. And in response Mr Sell agreed to let your friend have a look at it, but only if he were present at the same time, to make sure nothing happened to the car?---Yes. Do you recall his response?---Yes. And I would suggest to you that on one of the occasions when you called into his house to drop in an instalment of cash, around about Christmas 2013, Mr Sell asked you when you would likely get your - he called it "evaluator" - to value the car. And you replied to him that it would be within the next two months. Do you recall saying that to him?---Yes. … HIS HONOUR: …---… But they [Mr Sell and his partner] did ask me, on a number of occasions, "Do you want your friend to come down and see it?" And I was - kept saying yes - kept saying yes, but eventually I just - yes. I didn't. To me, all the evidence was there that the car was a genuine vehicle, from the stampings and the rego papers and the letter from Ford. 35 The relevant passages of Mr Sell's evidence in cross-examination by Mr Spencer, counsel for Mr Walker at trial, were as follows: MR SPENCER: … Well, you were aware that - on your understanding of it, at least from 2010, you understood that you had a car worth about $80,000?---Mr Cuthbert come and valued the car for approximately $80,000. He said to me that with the scratches, the bits that need doing, everything else, he said that's all he could value it at. He told me it's worth between 80 and 150 as is. Yes. And so the answer to my question is that you were aware, at least from the time that you met Mr Cuthbert, that you had a car that was worth at least $80,000?---Yes. And you're aware that authenticity was a significant component in the value of that car, weren't you?---Yes. … MR SPENCER: You knew that what he wanted was a genuine GTA Charger?---Yes. And he didn't want an XY rebodied car that had never been a GTA Charger in any shape, or form, did he? You knew that?---I didn't know that. I didn't [sic] it was an XY. I'm not asking you that question, but you knew that what Mr Walker wanted was a GTA - - -?---Yes. MR CHANDRASEGARAN: Your Honour, how could the witness comment - - - HIS HONOUR: No. I will allow the cross-examination. MR SPENCER: You understood fully, at the time that Mr Walker came, that what he was after was a genuine GTA Charger?---Genuine. Yes. Yes. Now, you didn't show him Mr Cuthbert's report, did you?---Well, there was no need for it. I told him a report. [Mr Walker] did not ask for it, for one. He asked me for the Ford, so I gave him the Ford report. … MR SPENCER: … And if you turn to page 14, that's the letter that was signed on that day. Do you agree with that?---Yes. And that made it perfectly plain, didn't it, that the car that was the subject of the sale was supposed to be a GTHO?---Yes. And supposed to have the VIN number that's recited in that letter?---Yes. … MR SPENCER: … And Mr Walker took the car?---Yes. And that was, effectively, on 7 August 2014?---Yes. And two weeks after, he rang you and - well, less than two weeks later, he rang you and complained that what you had sold him wasn't a GTHO?---Mr Walker rang me, and told me, he said, "You've sold me a fake", and I said, "Excuse me?" He said, "You've sold me a fake", and I said, "I'm sorry. It is not. To my - best of my knowledge it's not." Right. But it was a fake, wasn't it?---Well, I only found that out after it was inspected by the man who said it was a genuine item. Yes. But it was a fake?---Apparently. Yes. 36 The primary judge found: (1) the evidence of Mr Walker to have been self-serving and evasive and the answers given by him were non-responsive on a number of occasions; (2) Mr Walker was seeking to advocate his case in a manner that undermined his credit; (3) to the extent of a conflict, the evidence of Mr Sell was preferred to that of Mr Walker; (4) that the circumstances in which Mr Walker entered into the contract to purchase the vehicle entailed Mr Walker forming his own conclusion as to the genuineness of the vehicle as described that he was inspecting, and that conclusion was based on that inspection and his belief as to his ability to identify whether the vehicle was genuine or not; (5) that the inspection by Mr Walker was not what an ordinary, reasonable person would have done in relation to a vehicle of that kind and age in circumstances in which he had been informed that it had been the subject of a change in colour, the engine block had been replaced and an alteration to the radiator had occurred; (6) that in those circumstances an ordinary, reasonable person would have engaged in a thorough examination or required a person familiar with such vehicles to determine whether the vehicle was in fact as described; (7) the inspection by Mr Walker was not thorough or reasonable; (8) that while there were advertisements that gave rise to the attendance of Mr Walker at the premises of Mr Sell at Wodonga, Mr Walker had relied upon his own inspection of the car in deciding to purchase it; and (9) Mr Walker did not rely on any representations made by Mr Sell either orally or in writing. 37 The primary judge also made adverse credit findings against Mr Walker based on the evidence given in cross-examination.

Submissions for the parties 38 Each of the parties provided comprehensive written and oral submissions which were of great assistance in determining what the outcome of the appeal and cross-appeal should be. I expressly record my appreciation for the quality of the representation on both sides. On any view, this has been a difficult decision made at least more focused and better informed, if not easier, by the efforts of the legal representatives.

Submissions in chief for the purchaser appellant (Mr Walker) 39 Mr James Emmett of counsel appeared for Mr Walker on his appeal, not having appeared in the Court below. The written submissions under the hand of his instructing solicitors and adopted by him at the hearing of the appeal may be summarised as follows. 40 The car was advertised for sale as a "1970 Ford GTHO Falcon Sedan", was referred to in the letter from Ford as having a VIN that matched a "Ford XW GTHO Sedan" and reference was made to an expert valuation report which referred to the car as a "Ford XW GT HO" - noting that, quite correctly, Mr Walker did not rely on the advertisement as a term of the contract for sale. After Mr Walker agreed to purchase the car, Mr Sell's partner prepared a document signed by the parties which referred to a "GTHO 1970" and included the VIN found on the car. 41 A sale of goods by description will occur where the purchaser relies on the description given by the vendor, citing Ashington Piggeries Ltd v Christopher Hill Ltd [1972] AC 441. It was submitted that it is not necessary that the purchaser places exclusive reliance on the description given, citing Thornett & Fehr v Beers & Son [1919] 1 KB 486. 42 A number of authorities establish that the fact that goods have been viewed by a purchaser does not prevent the sale being by description, as detailed below. 43 In the Privy Council decision in Grant v Australian Knitting Mills Limited (1935) 54 CLR 49 (Grant PC), in a judgment delivered by Lord Wright it was said at 61.6: [T]here is a sale by description even though the buyer is buying something displayed before him on the counter: a thing is sold by description, though it is specific, so long as it is sold not merely as the specific thing but as a thing corresponding to a description, e.g., woollen under-garments, a hot water bottle, a secondhand reaping machine, to select a few obvious illustrations. 44 Prior to Grant PC in the High Court, Dixon J in Australian Knitting Mills Limited v Grant (1933) 50 CLR 387 (Grant HCA) [overturned by the Privy Council and reinstating the trial judge's judgment for the purchaser, but on grounds not material to the principles at issue in this case] said at 417.5 (bold emphasis as per submissions): When identified goods are sold, it is obvious that they remain the subject of the sale whether they do, or do not, correspond with the description which the parties have given them. But, however certainly the identity of the goods may be established, the parties must, since the intention is expressed or communicated, refer in some way to the goods. They must use some "description" to refer to them. A difficulty, therefore, cannot but arise in determining when the sale is "by" description and when not. Apparently the distinction is between sales of things sought or chosen by the buyer because of their description and of things of which the physical identity is all important. 45 A sale of goods by description will occur if the buyer has seen the goods and, quoting from Beale v Taylor [1967] 3 All ER 253 at 255F, the "deviation of the goods from the description is not apparent". 46 On the basis of the above principles, to establish a breach of the implied warranty, Mr Walker must demonstrate that: (1) the car was given a description; (2) he placed some reliance on the description; and (3) the car did not meet the description. 47 The evidence, which was referred to in some detail, did not support the primary judge's finding that Mr Walker's inspection was the only thing he relied upon, and that it was impossible to say that Mr Walker placed no reliance on the description that had been given in all the circumstances - there was at least some reliance, and that was enough. 48 The primary judge did not explain how the like cases of Beale v Taylor, Sammut v De Rome [2011] QDC 294 and Cassar v Pegoraro [2011] VCC 819 had been distinguished, each of which had some factual similarities, and the purchaser had succeeded. [It is important to note at this juncture that one such point of distinction, relied heavily upon by Mr Sell, is that none of those three cases involved any lengthy intervening period between advertisement, viewing and inspection and completion of the sale, although it is regrettably correct that the primary judge made no reference to that or any other point of perceived distinction. I also add that while Beale v Taylor warranted closer attention, I did not find Sammut or Cassar particularly helpful in terms of principle as each turned on its own facts.] 49 It was submitted that the primary judge erred in finding that it was not reasonable for Mr Walker to rely on the representations made by Mr Sell as to the identity of the car, because such reliance was reasonable in all the circumstances. The primary judge's finding that a reasonable inspection would have revealed that the car was not as it had been described was a finding that imposed an unrealistic and inappropriate standard on purchasers that was inconsistent with the evidence and incorrect as a matter of law because: (1) none of the cases cited sought to impose on purchasers an obligation to conduct a thorough inspection, or the use of an expert, in order to obtain the benefit of the implied warranty; (2) the inspection by Mr Walker was no less thorough than those in the cases cited, such that it could not be concluded that it was not a thorough inspection; (3) Mr Walker did not have any expertise and a reasonable person in his position would not identify any physical characteristic to suggest the car was not as described, analogous to the position of the buyer in Beale v Taylor; (4) Mr Cuthbert, an expert, got it wrong and therefore it was unreasonable to expect Mr Walker to have correctly identified the make of the car; (5) the primary judge did not determine Mr Walker's claim for breach of an express warranty arising out of the description in the 21 August 2013 document signed by the parties. 50 Mr Emmett's oral submissions acknowledged that while the starting point is caveat emptor, Mr Walker relied upon three established exceptions which effectively passed the risk of genuineness to the vendor, being: (1) s 18 of the Goods Act; (2) an express term of the contract; and (3) a representation in trade or commerce. 51 Mr Emmett relied on Beale v Taylor at 255-256 and Grant PC at 61 (quoted above). He properly accepted that once the propositions of law were stated, it then becomes a matter of factual analysis. He submitted that this case was on all fours with Beale v Taylor, being a relatively straightforward sale by description. There was no displacing of the terms of s 18 of the Goods Act as allowed by s 61. It was submitted that this conclusion was supported by Ashington Piggeries at 495 and 511. 52 Mr Emmett further submitted that the fact that Mr Sell accepted that if the goods were not as described, Mr Walker would be able to rescind the contract indicated that this was a contractual requirement. The reliance by Mr Walker did not have to be reasonable, provided it actually existed.

Submissions for the vendor respondent (Mr Sell) 53 Mr Suryan Chandrasegaran, solicitor, appeared for Mr Sell both in the Court below and in this Court. His written submissions on the appeal largely sought to defend the conclusions reached by the primary judge. The key points made by Mr Chandrasegaran are detailed below. 54 It was submitted that the primary judge was correct to conclude that no representations were relied upon by Mr Walker, as admitted by him in evidence and demonstrated by conduct including at the time of contracting making his own investigations into the basis for Mr Sell's belief and making it clear he intended to rely upon his own expert. It was not a sale by or based on description, but rather based on Mr Walker's "own physical inspection and his belief as to his ability to identify the original genuineness of the vehicle by his inspection" (primary judgment [5]) as well as communications with an unknown "friend who was an expert, who [Mr Walker] had communicated with in relation to the nature of the vehicle" (primary judgment [6]). 55 In relation to the cases relied upon by Mr Walker, it was submitted that Ashington Piggeries and Grant PC could be distinguished because there was no opportunity to inspect. In Thornett the statutory warranties had been found not to apply because the buyers had an opportunity to conduct a proper inspection and chose not to. Beale v Taylor could be distinguished because the buyer had no opportunity to inspect, the vehicle in that case was not roadworthy at all, and the price, even adjusted to current values, was not such as to give rise to any expectation of due diligence on the part of the buyer, unlike this case. Cassar and Sammut could similarly be distinguished because there was little opportunity to inspect and ascertain that the car in question was not as described, and in Sammut there was an indication of impropriety by the seller. 56 It was suggested that a better case to compare was Tsoutsouras v Wilson [2007] NSWLC 24, in which it was concluded that a failure to take advantage of an opportunity to investigate the genuine nature of a collectable car constituted an election to take the risk, relying on the principle stated in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at 179 [40] that it is not the subjective beliefs or understandings of the parties that matters in determining rights and liabilities under a contract, but rather what each party by words and conduct would have led a reasonable person in the position of the other party to believe. Applying Toll v Alphapharm to this case, by maintaining during a nearly one year settlement period that he was intending to have the car inspected by an expert, Mr Walker led Mr Sell reasonably to believe there was no reliance on Mr Sell's representations as to the genuineness of the car. 57 It was submitted that even if the primary judge erred in finding that this was not a sale by description, the operation of s 61 of the Goods Act applied by reason of the agreement to let Mr Walker commission his own expert prior to settlement so as to negative any statutory warranty that otherwise applied. Even if there was reliance it was not reasonable because Mr Sell was not an expert in cars and never held himself out to be, Mr Walker was on notice of express departures from the supposed original state of the car, putting him on notice that there may be an issue in this regard and that he should make his own investigations, and the value gave rise to a need for buyer diligence. 58 The finding by the primary judge that an ordinary reasonable person would have conducted a thorough examination to determine whether the car was genuine was neither unrealistic nor inappropriate, and that this is a standard imposed by Thornett and Tsoutsouras in relation to cars of significant value when there was a real opportunity to inspect. 59 The suggestion that Mr Cuthbert, in the course of preparing his first expert report, did not detect that the car was not genuine and therefore any expert retained by Mr Walker would not be able to either is not supported by the fact that the person who examined the car after settlement identified it as not being genuine immediately, a point reinforced in oral submissions. It is convenient to note at this point that Mr Cuthbert stated in his second report that he relied on the letter from Ford and did not undertake an examination to confirm identity at the time. That rather tends against statements in Mr Cuthbert's first report that he inspected the vehicle on 13 July 2010, provided comprehensive details in relation to the location of the VIN on the car, and that in the preparation of his report had made all necessary enquiries that he believed were desired and appropriate and that no matters of significance had been withheld. The evidence indicates that the person who examined the car after settlement did not hold himself out as an expert. 60 The suggestion of a failure to determine Mr Walker's claim for breach of an express term of the contract fails because this was a common mistake so that the purchaser assumed the risk, applying Bell v Lever Brothers Ltd [1932] AC 161; and because it was an oral term of the contract that Mr Walker would arrange his own expert to inspect the car before settlement. 61 Mr Chandrasegaran's oral submissions sought to distinguish the authorities relied upon by Mr Emmett for Mr Walker upon the basis that unlike any of those cases, there had been a very substantial time in which Mr Walker could have carried out an inspection. The provision for inspection was part of the contract, and was a s 61 agreement or otherwise the negativing of any statutory warranty or condition. The inspection was a contractual right that Mr Walker chose not to exercise. The true nature of the contract was that Mr Walker had assumed the contractual risk as to whether or not the car was genuine, encapsulated by the notion that Mr Sell was, in context, asserting no more than that the car was, to the best of his knowledge, genuine. The right to inspect the car was not merely permission outside the terms of the contract, but rather an oral term of the contract for sale to enable Mr Walker to carry out such an inspection before settlement. 62 It was submitted that it was open to the primary judge to find that the car was not purchased on the basis of the description given to Mr Walker by Mr Sell, but rather based on Mr Walker's own physical inspection of the car, his belief as to his own ability to identify what a genuine car would look like by his inspection, and his contractual right to have a further expert inspection prior to settlement. The substance of the case for Mr Sell was that this was a sale by inspection rather than by description, both at the time of signing the contract, and by way of a right created then, exercisable in the future, but never in fact exercised, to have an expert inspection. 63 Mr Chandrasegaran further submitted orally that, consistently with his written submissions: (1) Ashington Piggeries was distinguishable because in that case there was no opportunity for inspection. The role of the year of the car provided in the signed contract was in the nature of identifying a kind, class or species rather than a particular quality or identity. (2) Thornett was directly applicable, because in that case, as in this, the buyers had an opportunity to conduct a proper inspection. (3) Grant PC was distinguishable because in that case there was no opportunity to inspect, forcing reliance on the description, and it is also authority for the proposition that the implied condition only applies to defects not reasonably discoverable. (4) Mr Walker had given express evidence that he decided to buy the car based on his personal inspection. (5) The evidence as to Mr Walker getting the car valued had to be understood as having its genuineness ascertained because that was the primary driver of value.

Submissions in reply for the purchaser appellant (Mr Walker) 64 In reply, Mr Emmett said that the issue of inspection had no express reference to assessing genuineness, and the difference was considered in Mr Cuthbert's second report. The post-settlement examination on behalf of Mr Walker entailed the use of a hoist, which was not contemplated by the parties during the one year settlement period. There was no evidence that the inspection contemplated by the parties would have revealed that the car was not genuine, and also no evidence of any agreement on the form of inspection (other than that Mr Sell had to be there while whomever attended). [As is noted below, whatever subjective view of this agreement was held by Mr Walker, when viewed objectively as required, the inspection agreed to was unfettered as to scope or manner.] 65 Mr Emmett also submitted that the right to inspect was not a contractual term, but rather only the giving of permission or the language of understanding. Any collateral contract to that effect had to be proved strictly, relying on a case brought to the attention of the parties by the Court, Marks v Hunt Brothers (Sydney) Pty Ltd (1958) 58 SR (NSW) 380 at 384. 66 It was submitted that the description given to the car was of a kind or species, not a matter of quality. Tsoutsouras was not applicable because it did not involve any representation of genuineness. Mr Sell had represented the car was genuine, albeit not in original condition.

Trade or commerce issue and the issue of federal jurisdiction 67 It is convenient to address first the issue of whether the sale of the car was in trade or commerce because that is one of the applicable gateways to considering Mr Walker's cause of action under s 18 of the Australian Consumer Law. For reasons considered further below, the correct description of the legislation relied upon was s 18 of the Australian Consumer Law (Victoria). 68 Supplementary post-hearing written submissions on the question of whether the sale of the car was in trade or commerce were provided by the parties with leave of the Court. The parties agreed that it is the conduct involved that determines whether the transaction meets that description, rather than on the range of activities otherwise engaged in by the party against whom the case is brought: Hearn v O'Rourke [2003] FCAFC 78; (2003) 129 FCR 64. Where the parties differed was in the characterisation of what occurred. 69 Mr Emmett argued that the transaction had a commercial character in the sense in which that phrase was used in Re Ku-ring-gai Co-operative Building Society (No 12) (1978) 22 ALR 621 at 648-9 and Concrete Constructions (NSW) Pty Limited v Nelson (1990) 169 CLR 594 at 604. He pointed to the following factors: (1) the advertisement for sale on Gumtree was equivalent to an open market; (2) the transaction was at arm's length between strangers; (3) the presence of commercial terms such as payment by instalments and Mr Walker to meet registration and insurance costs until he took possession; (4) the dominant purpose of the sale was to raise funds; (5) the car was an asset that was not usually owned purely for pleasure or convenience but rather having substantial value; (6) the car was sold with a letter from Ford as a commercial manufacturer confirming authenticity; (7) the use of the car for hire as a wedding vehicle (albeit in a minor way); and (8) the critical conduct being a representation as to value. 70 Mr Emmett relied on Bevanere Pty Ltd v Lubidineuse (1985) 7 FCR 325 in which the sale of an asset by a business that was not engaged in selling such assets was found to be in trade or commerce, albeit that the asset being sold was being used for a business activity. 71 In reply to those submissions, Mr Chandrasegaran argued that the passage from Ku-ring-gai Co-operative Building Society relied upon concerned whether or not a transaction has to be arm's length to be in trade or commerce. That point is well-taken. Immediately following the passage relied upon by Mr Emmett, the Full Court made it clear that what mattered was the commercial or business nature of the dealings, even if they fell outside the mainstream of ordinary commercial activities and even if they had an element of altruism to them. The key concepts concern commerce or business, as the words trade or commerce in ordinary parlance would imply. 72 In responding to the particular aspects of characterisation relied upon to give the transaction a commercial character, Mr Chandrasegaran submitted that: (1) Gumtree was an informal online sales platform used by private individuals outside trade or commerce; (2) the arm's length and interstate nature of the transaction [due only to Mr Walker living in Sydney] was largely irrelevant; (3) the terms of sale were simply put and the bare necessity; (4) the dominant purpose of the sale was to raise funds for a private and not business purpose; (5) the dominant reason for owning the car was pleasure; (6) the Ford letter was not enough to change the character of the transaction; (7) the fact of any representation as to genuineness being made did not make an otherwise private sale one in trade or commerce; (8) the hire of the car, such as for weddings, was at cost price; and (9) the car was not intended to be used in a commercial manner. 73 Further, Mr Chandrasegaran submitted this case was more in line with the case distinguished in Bevanere, being O'Brien v Smolonogov (1983) 53 ALR 107, in which the sale of rural land not used to generate profit, even though it could have been, was found not to be in trade or commerce. 74 In Smolonogov, the Full Court at 111.5 drew guidance from United States consumer protection legislation cases in which it had consistently been held that a private sale of property by an individual was not conduct in trade or commerce except if done in the course of a business activity or arising in a business context. A number of cases were then considered in more detail and the conclusion reached at 113.7 that the transaction was not in trade or commerce because the lands acquired did not become trading stock, it could not be said to be more than the realisation of an asset that had not been used for any business activity and the only possible commercial aspect was public advertisement, which in isolation could not be determinative. 75 In Bevanere, a contrary conclusion was reached because the property being sold, as a one-off transaction, being a trading clinic, included goodwill and stock and was a business being sold as a going concern: at 329.6. The mere fact that it was a sale of a capital asset did not deprive the transaction of its commercial character: at 329-330. Making arrangements necessary to dispose of the clinic was part and parcel of the totality of the activities in trade or commerce: at 331.9. Smolonogov was distinguished because the land in that case was not used for any business activity: Bevanere at 330.7. 76 The conclusion I have reached is that, akin to the United States authority relied upon in Smolonogov, the private sale of the car by Mr Sell was not in trade or commerce because it was not done in the course of a business activity or arising in a business context. The very limited hiring out of the car for a total of some $2,000 over about 30 years was not nearly enough to change that conclusion. It was de minimis and peripheral. It follows that the sale of the car by Mr Sell to Mr Walker was not in trade or commerce, and s 18 of the Australian Consumer Law (Victoria) could not apply. 77 There is a further and separate jurisdictional problem, and one that is even more fundamental than the trade or commerce issue. 78 The scheme of the Australian Consumer Law, as it is most commonly referred to, is that of a dual Commonwealth and State or Territory regime, reflective of the differing constitutional powers of the different governments. This came about as a result of the Intergovernmental Agreement for the Australian Consumer Law of 2 July 2009. The legislative implementation of that agreement operates somewhat akin to the former cooperative scheme for companies from the 1960s, albeit that the device used then for a single text was ACT law passed by the federal Parliament prior to ACT self-government, and then counterpart legislation to apply that law in all other jurisdictions. 79 The text of the Australian Consumer Law sits in a statute passed by the federal Parliament, namely in Schedule 2 of the Competition and Consumer Act 2010 (Cth) (the CCA). That text is then picked up and applied as separate surrogate but parallel State or Territory law in each participating jurisdiction. The text in the CCA is also the federal manifestation of the Australian Consumer Law as statute law, subject to the limitations of the legislative power of the Commonwealth - largely the corporations, post and telecommunications and interstate trade and commerce powers, but also the Territories power. 80 The jurisdictional pathway by which the text of the Australian Consumer Law may apply to an intrastate transaction between natural persons in Victoria, such as this case which does not on the facts apparently engage any other head of federal legislative power, is the Australian Consumer Law and Fair Trading Act 2012 (Vic). Section 8 of that Act applies the text of the Australian Consumer Law as it appears in Schedule 2 of the CCA as a law of Victoria. As so applying it may be referred to as the Australian Consumer Law (Victoria): s 8(1)(b). 81 It is common to refer to the "Australian Consumer Law" without necessarily adverting to whether the version being applied is the federal or State/Territory version. This contributes to the erroneous impression that there is only one Australian Consumer Law. The practical effect of the dual scheme is to overcome what would otherwise be jurisdictional gaps. The true value is the practical effect of having a single national scheme cast in identical terms. 82 The jurisdictional source for the application of the text of the Australian Consumer Law was not apparently raised in the Court below. Except for the question of jurisdiction of the Court below and of this Court, that would not matter because, whatever the jurisdictional pathway, the text that applied, and the "trade or commerce" issue discussed above, is the same. It would not matter in a State or Territory court or tribunal in a participating jurisdiction, because they would be able to exercise their own locally bestowed State or Territory jurisdiction by which the text of the Australian Consumer Law becomes a part of the law of that jurisdiction, and if for some reason needed, federal jurisdiction bestowed by the Judiciary Act 1903 (Cth). In practice, it is likely to be only the local version that is applied. 83 In order to determine the jurisdiction of a federal court to entertain a consumer claim matter, the pathway for the application of the Australian Consumer Law is of critical importance. That is because, while State or Territory jurisdiction may be engaged as part of a federal court's accrued jurisdiction, that may, and in this case, does, first require some aspect of the proceedings to engage federal jurisdiction to which such extended jurisdiction can accrue. The Court below and this Court have direct federal jurisdiction in relation to matters brought under the federal CCA version of the Australian Consumer Law, but no such direct jurisdiction in relation to matters only able to be brought under a State or Territory version of the Australian Consumer Law enacted by a State or Territory law, such as the Australian Consumer Law (Victoria) via s 8 of the Australian Consumer Law and Fair Trading Act 2012 (Vic). It follows that s 18 of the Australian Consumer Law, in fact the Australian Consumer Law (Victoria), relied upon by Mr Walker was not federal law, and could not be the pathway for the Court below or for this Court to acquire jurisdiction. 84 Mr Emmett submitted that even if the sale was found not to be in trade or commerce such that the claim under s 18 of the Australian Consumer Law [(Victoria)] failed, neither this Court nor the Federal Circuit Court would be deprived of jurisdiction just because that was the sole basis for enlivening federal jurisdiction. That is because the claim was still genuine, even if erroneously made, and therefore not colourable (meaning made for the improper purpose of fabricating federal jurisdiction), citing Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation (1987) 76 ALR 173 at 181.8. Mr Chandrasegaran did not argue to the contrary. 85 While I have found that the sale was not in trade or commerce, and also found that neither the Court below nor this Court had jurisdiction to entertain an application under s 18 of the Australian Consumer Law (Victoria), this was not colourable, and therefore did not deprive either the Court below or this Court on appeal from determining the balance of the controversy. A future attempt to rely on a State or Territory version of the Australian Consumer Law for a transaction such as this may have greater difficulty being maintained in the Federal Circuit Court or in this Court if it is the only basis for jurisdiction as it may then more readily be seen as colourable.

Express term of the contract issue 86 In my view, it is near impossible, or at least not reasonable, on the facts of this case to treat the description of the car given in the 21 August 2013 contract between the parties differently for the purposes of considering whether this was an express essential term or condition of the contract than for the purposes of deciding whether an equivalent term should be implied by reason of there having been a sale by description. They amount to the same thing in this case. 87 The description or identification of the car given by Mr Sell to Mr Walker was either an essential term and condition of the contract, or it was not. That is so whether such a term is express or implied, so as to dictate what was to be supplied as part of the bargain reached. The meaning of the words used for the purposes of an express essential term or condition are required to be determined by reference to the objective intention derived from surrounding circumstances and conduct, applied to a reasonable person, rather than subjective intention: Toll v Alphapharm at 178-9 [38], [40]. The objective basis for implying an essential term or condition is to be determined in the same way, relying on the same contractual text and the same objective consideration of the surrounding circumstances. 88 This inter-relationship between words written, words said and conduct is acute in this case, while having careful regard to the abovementioned Toll v Alphapharm prohibition on subjective intention altering the objective nature of legal relations created. The principle of objectivity by which rights and liabilities of parties to a contract are determined is firmly entrenched, so that what matters is what each party, by words and conduct, would have led a reasonable person in the position of the other party to believe, not what they in fact, subjectively, believed. 89 If the finding is made that the description was given for the objectively ascertained purpose of representing what sort of car it was, namely a genuine car strictly meeting the written description, success on that point under s 18 of the Goods Act as a statutorily implied term produces parallel success for Mr Walker because the description used in the written contract must therefore be interpreted, in context, as an express term to the same effect, namely that the car was genuine. However, if the finding is made that the description was given for the purposes of no more than identification of the specific physical vehicle, distinguishing it from some other vehicle, that must be the contractual purpose of the words used and failure on that point under s 18 of the Goods Act to produce an implied term to that effect must produce failure for express term purposes as well.

Sale by description 90 The passage from Grant PC reproduced above at [43] helps Mr Walker if the factual finding is made that the car was sold as a thing strictly corresponding to the description given in writing, but helps Mr Sell if the factual finding is made that the car was sold as the specific thing, with the description given in writing amounting to no more than identification of this particular car. A similar sentiment, expressed somewhat differently by Dixon J in Grant HCA, reproduced above at [44], can be considered in much the same way: if the factual finding is made that the car was sought or chosen by Mr Walker because of its specific description, then that helps him provided that remained the proper characterisation of the use of the specific description given at the point of sale, but if the real purpose of the description by the time of entering into the contract was no more than to identify the car being sold, then that helps Mr Sell. 91 It is necessary to consider the authorities relied upon by the parties in some greater detail, before considering certain other authority that helps to resolve this difficult issue on the facts to be ascertained from the evidence in this case. 92 In Grant PC, the buyer, a doctor, purchased woollen undergarments which were impregnated with a chemical that gave him severe dermatitis. The buyer relied upon the sale being by description as a condition to being able to sue contrary to a provision that otherwise excluded any implied warranty or condition as to quality or fitness: see the text of the provision at the foot of the first two pages of Grant HCA at 387-8. The quote reproduced from Grant PC at [43] above has to be understood as turning upon the objective factual circumstance of a lack of any opportunity to inspect and detect the defect in quality or fitness, which in turn allowed a case to be brought upon that basis. Even the reference in that quote to a "secondhand reaping machine" relates to latent defects as to quality or fitness in the context of a sale by description. Viewed in that way, Grant PC does not afford Mr Walker the assistance that it first appears to. The objective facts could support no other conclusion than that the sale of the undergarments was by the description given. There is no such factual inevitability in this case. 93 Ashington Piggeries was a quality or fitness case and a merchantable quality case, in which a finding of a sale by description was necessary in order to have implied a warranty or condition as to those characteristics. The plaintiffs were the suppliers of an animal foodstuff to mink breeders. Thousands of mink died because of an ingredient supplied by a third party which was contaminated with a preservative that contained a substance poisonous to mink but not to other animals. The vendor plaintiff sued for payment for the foodstuff, and the purchaser defendant countersued on the provisions for an implied condition as to a quality or fitness, or merchantable quality. The House of Lords ultimately found for the purchaser defendant. Again, the sale was unavoidably by description largely because inspection was impossible, such that reliance was also unavoidable. Once again, that critical circumstance makes this case of no real use in this situation in which a determination has to be made as to the impact of not just an opportunity for more thorough inspection, but express agreement that this could take place at any time prior to settlement in the distant future. 94 Beale v Taylor at first blush offers support for Mr Walker's case. As noted above, Mr Emmett described this case as being on all fours with the present situation. However a closer analysis does not reveal that to be so. The defendant seller had a car which he believed to be a particular make, year and model. He had owned it for some time, wanted to sell it and advertised it for sale, describing it as he understood it to be, namely a "Herald convertible, white, 1961, twin carbs". The buyers came and looked at the car, were driven in it and bought it. There was a short delay before settlement upon payment of the balance of the purchase price, after which the buyers drove the car away. When the buyers put the car into a garage to fix a problem with the steering, it was discovered that the car was in fact a composite from two cars, one half being older than described. When the dispute that arose as to the overpayment for the car was unable to be settled, the buyers sued. The trial judge found for the seller. 95 An appeal by the buyers to the English Court of Appeal was successful, reversing the costs order below, but with no order as to costs of the appeal. Sellers LJ (with whom Danckwerts LJ and Baker J agreed) referred to the English equivalent of s 18 of the Goods Act, and said at 255E-G: [C]ertainly there is good authority for saying that, if the buyer has not seen the goods, then in the ordinary way the contract would be one where the buyer relied on the description alone. Sale of goods by description may, however, apply where the buyer has seen the goods if the deviation of the goods from the description is not apparent; but even then … when the parties are really agreed on the thing sold a misdescription of it in the contract may be immaterial. The question in this case is whether this was a sale by description or whether, as the seller contends, this was a sale of a particular thing seen by the buyer and bought by him purely on his own assessment of the value of the thing to him. [Emphasis added] 96 His Lordship quoted the same passage from Grant PC reproduced at [43] above, and observed at 255-6: I think that, on the facts of this case, the buyer, when he came along to see this car, was coming along to see a car as advertised, that is, a car described as a "Herald convertible, white, 1961". When he came along he saw what ostensibly was a Herald convertible, white, 1961, because the evidence shows that the "1200" which was exhibited on the rear of this motor car is the first model of the "1200" which came out in 1961; it was on that basis that he was making the offer and in the belief that the seller was advancing his car as that which his advertisement indicated. Apart from that, the selling of a car of that make, I would on the face of it rather agree with the submission of the seller that he was making no warranties at all and making no contractual terms; but fundamentally he was selling a car of that description. 97 His Lordship concluded at 256D-E: It is true that the learned judge in his judgment came to the conclusion that "The [buyer] and his mother formed their own judgment and made an offer of £160 which was accepted and the money paid". Forming their own judgment of the condition of the car, I think the learned judge meant, and that is right; but forming their own judgment whether it was a car of that sort not, I think not; they took it for granted on the representation that was made to them by the seller by his advertisement and by the rear of the motorcar which was in front of them, the front not disclosing that it was of a different, earlier model. [Emphasis added] 98 It may therefore be observed that the buyers in Beale v Taylor succeeded on appeal because they "took it for granted" that the car was as described by the seller. Their inspection, such as it was, concerned the condition of the car, not its identity. It truly and objectively was therefore a sale by the description given. There was not just partial reliance on the advertisement, confirmed by the appearance of the car consistently with the advertisement, but, objectively, complete reliance. The facts in this case are sufficiently different from those in Beale v Taylor for that case to be of no real assistance here. As with so many of these cases, it is really the facts that determine the outcome. 99 Thornett was a merchantable quality case, involving defective glue. The legislative provision implied merchantable quality, except in circumstances where the buyer had examined the goods and such examination ought to have revealed the defect. The inspection that was carried out was not performed well enough, but that was enough to trigger the proviso. Accordingly, no condition was implied. The legislative provision was so different to the present that this case does not assist Mr Sell as argued on his behalf. 100 The problem is that none of the above cases relied on by either party is on all fours with the present case. That is not said as any criticism. Resort to research to find other and better authority, in the sense of more comparable to and therefore better addressing the present situation, has been necessary to overcome that difficulty. 101 In Harlingdon and Leinster Enterprises Ltd v Christopher Hull Fine Art Ltd [1991] 1 QB 564, a painting was sold on the common understanding of both the art dealer vendor and art dealer purchaser that it was by Gabriele Münter, a painter in the German expressionist school. The painting was on-sold by the art dealer purchaser as a retail transaction. The retail customer sent the painting for examination by experts in the work of Münter, who concluded that the painting was a forgery. The purchase price was refunded by the original art dealer purchaser to the retail customer and a refund was also therefore sought from the original vendor. That request was refused. The original purchaser sued under the equivalent to s 18 of the Goods Act and also for action or misrepresentation under a similar provision to s 18 of the Australian Consumer Law. That suit was unsuccessful. 102 The decision of the trial judge in Harlingdon was upheld (by a majority) in the English Court of Appeal. Nourse LJ in the majority said at 571E: The sales to which the subsection is expressed to apply are sales "by description". Authority apart, those words would suggest that the description must be influential in the sale, not necessarily alone, but so as to become an essential term, i.e. a condition, of the contract. Without such influence a description cannot be said to be one by which the contract for the sale of the goods is made. [Emphasis in original] 103 His Lordship at 571F quoted with approval the earlier decision of Varley v Whipp [1900] 1 QB 513 at 516 where it was said: The term "sale of goods by description" must apply to all cases where the purchaser has not seen the goods, but is relying on the description alone. It applies in a case like the present, where the buyer has never seen the article sold, but has bought by the description. In that case, by the Sale of Goods Act, 1893, s. 13, there is an implied condition that the goods shall correspond with the description, which is a different thing from a warranty. The most usual application of that section no doubt is to the case of unascertained goods, but I think it must also be applied to cases such as this where there is no identification otherwise than by description. 104 His Lordship also said at 572C: Other authorities show that section 13(1) may apply to a contract for the sale of specific goods which have been seen by the buyer, provided that their deviation from the description is not apparent on a reasonable examination: see Chalmers' Sale of Goods, 18th ed. (1981), p. 120 and the cases cited in footnote (a), to none of which we were referred in argument. We were, however, referred to another authority in the same category: see Couchman v. Hill [1947] 1 K.B. 554, where the plaintiff purchased from the defendant at auction a heifer which was described in the sale catalogue as "unserved." Later, having been found to be in calf, she died as a result of carrying it at too young an age. After the plaintiff had overcome an objection which is immaterial for present purposes, it was held by this court that the description of the heifer as unserved constituted a condition of the contract. Scott L.J., with whose judgment Tucker and Bucknill L.JJ. agreed, said, at p. 559: "as a matter of law, I think every item in a description which constitutes a substantial ingredient in the 'identity' of the thing sold is a condition ..." We may be sure that the heifer had been seen by the buyer, but that the fact of her being in calf was not apparent on a reasonable examination. The buyer must have relied on the description. Although he did not rely on the description alone, it was held to be a substantial ingredient in the identity of the heifer or, if you prefer, an essential term of the contract. [Emphasis added] 105 His Lordship further observed at 574F: … The description must have a sufficient influence in the sale to become an essential term of the contract and the correlative of influence is reliance. Indeed, reliance by the buyer is the natural index of a sale by description. It is true that the question must, as always, be judged objectively and it may be said that previous judicial references have been to subjective or actual reliance. But each of those decisions, including that of Judge Oddie in the present case, can be justified on an objective basis. For all practical purposes, I would say that there cannot be a contract for the sale of goods by description where it is not within the reasonable contemplation of the parties that the buyer is relying on the description. For those purposes, I think that the law is correctly summarised in these words of Benjamin on Sale, which should be understood to lay down an objective test: "Specific goods may be sold as such . . . where, though the goods are described, the description is not relied upon, as where the buyer buys the goods such as they are." [Emphasis added] 106 What emerges from Harlingdon is that emphasis must be placed on the word "by" in the phrase "sale of goods by description" in the English provision equivalent to s 18 of the Goods Act to indicate that the goods in question were being sold principally, if not entirely, by reference to its description rather than by reference to the individual item itself. The description must, objectively, be relied upon to a sufficient degree, and be so influential, that it is an essential term. It must be "within the reasonable contemplation of the parties that the buyer is relying on the description" for it to be a sale by description. That will most readily and indeed invariably be the case when the goods are not seen by the purchaser. 107 When the goods have in fact been seen by the purchaser and even more so when the circumstances provide for a reasonable opportunity for examination in order to ascertain that the goods are indeed what they are referred to as being in the sale process, a careful consideration of the facts and circumstances of the sale is required, including as to what was said, both orally and in writing. Objective reliance is likely to be the critical fact, if not determinative, in an asserted sale by description case in which there was a reasonable opportunity for inspection prior to the purchase transaction being concluded and title passing. Applied to the facts in this case, the live question is whether Mr Walker has discharged the onus of showing objective reliance by him on Mr Sell's statement as to what the model of the car really was. 108 Mr Walker did not deny in cross-examination that he had raised with Mr Sell the topic of having the car examined, and that this was agreed to. That is therefore an objective fact of some importance, from which objective conclusions can be reached. While paragraph 14 of Mr Walker's affidavit in reply, reproduced at [33] above, asserts a subjective intention to confine the proposed examination to matters other than value, it is impermissible to place any reliance on this evidence to limit the objective effect of such an agreement. 109 That is especially so given that there was no evidence that any such limitation was conveyed to Mr Sell as part of what was agreed, so as to give any objective basis for a reasonable person to reach that understanding. There was nothing to confine the scope of the independent inspection. On the evidence, it was unfettered and limited only by what Mr Walker chose to do, which in the end was not to have any independent inspection carried out at all. Inspection only took place after settlement, and therefore outside the terms of what had been agreed with Mr Sell. This was almost 12 months after the contract was entered into with consideration at the time of contract formation in the form of payment of a $10,000 deposit. 110 The agreement to inspect must therefore be viewed objectively as an agreed right to have an independent inspection of unlimited or at least undefined scope. This is an objective fact derogating from reliance on what Mr Walker had been told by Mr Sell. 111 It was open to the primary judge to conclude that Mr Walker did not in fact rely in a material way on anything said by Mr Sell, or beyond his inspection of the car supported by the examination of documents, to reach his own conclusion that the car was genuine. This conclusion was open on the overall burden of the evidence of Mr Walker, key parts of which are reproduced above. Parts of Mr Walker's evidence were in conflict on this point to some degree. It was open to his Honour to characterise Mr Walker's evidence as self-serving and evasive, non-responsive on a number of occasions and seeking to advocate his case in a manner that undermined his credit. His Honour was also entitled to resolve the conflict between the evidence of Mr Sell and Mr Walker adversely to Mr Walker. 112 Although not as clear-cut, the primary judge was also entitled to conclude that the circumstances in which Mr Walker entered into the contract to purchase the car entailed him forming his own conclusion as to the genuineness of the vehicle he was inspecting based on his belief as to his ability to identify whether or not it was genuine. This conclusion is supported by the fact that Mr Walker decided not to have an independent inspection carried out throughout the course of the 12 month settlement period, despite the agreement with Mr Sell that he could do so. There is no proper basis for this Court to find that his Honour erred in reaching any of these conclusions. 113 It is not necessary to reach a conclusion as to the correctness or otherwise of the primary judge's conclusion that Mr Walker's inspection of the car on the day the contract was made was not reasonable, or the conclusion that an ordinary reasonable person would have engaged in a more thorough examination or required a person familiar with such cars to determine whether it was in fact genuine. There are good reasons why such a conclusion should not readily be reached as any form of universal requirement to be imposed on a purchaser in relation to the sale of goods by description, not least because such a requirement is not to be found in the text of s 18 of the Goods Act. Moreover, in this case it is an undisputed fact that there was an agreement between the parties to permit Mr Walker to organise an independent inspection. In circumstances in which such an agreement was reached, it was not necessary to conclude that either agreeing to such a step or carrying it out was required, although any such universal proposition seems doubtful. The existence of that agreement in this case, in the context of the rest of the evidence, is sufficient to address the question of objective reliance. 114 It was also open to the primary judge to conclude, and therefore for this Court to conclude independently, that on the evidence of Mr Sell he said things to Mr Walker that would have conveyed to a reasonable person that what he was saying about the genuineness of the car was based on nothing more than his belief. The fact that his Honour did not make any such finding does not deny the entitlement of this Court to do so. I therefore make that finding. 115 A substantial opportunity to inspect in the lengthy period before settlement, and the mutual expectation that this would take place, to the extent of being a contractual right forming part of the contract of sale enjoyed by Mr Walker, is an objective basis upon which to view and assess the question of whether Mr Walker's express evidence that he bought the car based on his own inspection was a mere slip of the tongue, sought to be corrected by his later evidence, or a reflection of the objective reality in the nature of an admission. The combination of that evidence, the right to inspect prior to settlement, and the implied right to rescind if that inspection revealed that the car was not in fact genuine, casts doubt upon the existence of the degree of objective reliance that Mr Walker needs in order to succeed in making the description given an essential term of the contract to the effect that the car was genuine. Put another way, the necessary determination is as to whether it truly was a sale by description, and not just a sale with a description sufficient only to identify this car apart from any other car. 116 It follows from the above that, in the circumstances of this case, three objective facts carry the most weight: (1) the terms used in the written contract, which must prevail to the exclusion of any subjective expression by either party; (2) the proper characterisation of the agreement between the parties that Mr Walker was entitled to have an independent inspection of the car; and (3) an extended settlement period in which such an inspection could take place, initially eight months, extended by agreement to 12 months. 117 As to the terms of the written contract, as reproduced at [29], they were: I Glen Sell will state that I will hold said vehicle GTHO 1970 Vin: JG33KP16488 for a period of 8 months maximum. Final payment to be made no later than 21st Day April 2014. 118 I interpret those words as being principally and objectively concerned with specifically identifying the car that was being held for a stipulated period. I do not consider those words of themselves reasonably and objectively convey any term or condition of the contract addressing the genuineness of the vehicle. 119 As to the inspection, for the reasons already expressed, that right was an essential oral term of the contract for sale agreed upon at the same time. It was not a collateral contract. In context, if the inspection before settlement revealed that the car was not genuine, Mr Walker would have had a right to rescind and recover payments already made. No other objective dominant purpose for having the right to have such an inspection take place is apparent. Mr Walker chose not to exercise that unfettered contractual right of inspection over the very lengthy period available to him. But by agreeing to it, the parties may objectively be seen to have agreed that Mr Walker was not relying on the description given in the written contract to make it a sale by that description. This conclusion reinforces the interpretation of the text of the contract above. 120 In this case, as noted above, it can also objectively be determined that Mr Sell, as vendor, was not proffering his own expert or absolute view that the goods were in fact what they purported to be, as opposed to his belief as to what they were, relying upon the expertise or views of others, including: (1) the vendor of the car to him some 30 years ago; (2) the opinion of the supposed expert, Mr Cuthbert, retained by his ex-wife for the purposes of valuation for their divorce settlement; and (3) the letter from Ford, which was based on the vehicle identification number (VIN) plate affixed to the car. 121 It should be noted that although Mr Sell told Mr Walker about the existence of the report by Mr Cuthbert, Mr Walker did not ask to be given a copy and Mr Sell did not provide either access or a copy. No reference was made by Mr Sell to Mr Cuthbert's valuation figure of $80,000, although Mr Sell's evidence is that this was at the bottom of the range he was verbally given by Mr Cuthbert of between $80,000 and $150,000. 122 Moreover, the cross-examination of Mr Sell did not squarely challenge his stated belief that the car was genuine, or that he had communicated that to Mr Walker. The existence of this belief, and Mr Walker's awareness of it, contrary to his evidence, is objectively reinforced by Mr Sell's ready agreement to Mr Walker's requirement to permit him to have the vehicle examined, albeit in his presence, at any time during the time allowed for payment to be completed prior to Mr Walker taking possession of the car. Mr Sell would hardly have agreed to such an inspection, let alone one to take place at any time over many months, with the risk of at least stopping payments and likely reversing the contract payments already made, if he personally held any doubt as to the genuineness of the car. 123 Further, that agreement makes sense as reflecting, objectively, an understanding reached between the two men that payment would not have to be completed (and implicitly payments already made refunded) if such an examination revealed that the vehicle was not genuine. Subjective assertions to the contrary cannot take the place of that reasonable objective inference. 124 For the foregoing reasons, I am of the view that the ultimate conclusion by the primary judge that there was no objective reliance by Mr Walker on anything written or said by Mr Sell as to the genuineness of the car so as to render this a sale by description to that effect was correct. This was neither an implied nor express term of the contract. 125 Even if I am wrong about that, I consider that in any event the oral component of the contract of sale giving Mr Walker a contractual right to have an independent inspection before settlement did constitute an event in "the course of dealings between the parties" negativing any condition of sale by description being implied by the operation of s 18 of the Goods Act by virtue of s 61 of that Act. That, coupled with the interpretation I have given to the express words used, denies Mr Walker the benefit of any express or implied basis for this having been a sale by description to the effect that the car was genuine.

Conclusion on the appeal 126 For the foregoing reasons, the appeal must be dismissed, with costs.

Costs at trial issue 127 Because the appeal must be dismissed, the cross-appeal on costs and the related interlocutory application to adduce further evidence in aid of that cross-appeal require determination. 128 The costs of the proceedings before the primary judge were determined in a second judgment delivered by his Honour on 7 April 2016. His Honour made verbal comments in relation to Mr Sell's application for costs following the dismissal of Mr Walker's application and supporting statement of claim. Those comments, in the nature of preferences, were fairly characterised by Mr Emmett as being to the effect that his Honour did not require a full bill of costs, but rather only wanted a three or four-page affidavit from both sides and did not want something that added to the costs of the parties. 129 The formal orders made and entered on 3 March 2016 were not in the same terms as the oral comments: 1. The application is dismissed. 2. The respondent file and serve an affidavit in relation to party-party costs within 7 days together with any submissions as to quantum. 3. The applicant file and serve any affidavit in response or any submissions within 7 days thereafter. 4. The Court reserves the quantification of costs to be paid by the applicant to the respondent, and unless requested by the parties or the parties otherwise agree, the Court will fix the quantum of costs on the papers. 130 The material filed by the respondent comprised a four-page affidavit by Mr Chandrasegaran in accordance with the limitations contained in the primary judge's comments, seeking costs and disbursements of $39,386.60. It appears that Mr Sell was seeking all of his costs and disbursements, and therefore an indemnity costs order, even though that term was not used. Mr Chandrasegaran's affidavit, apparently because of the comments made by the primary judge and in particular as to length, did not annex or include the primary material sought to be relied upon by way of fresh evidence in this Court, although it was undoubtedly available at that time. Most importantly, it did not include offers to settle the proceedings now sought to be relied upon, which might possibly (although not certainly) have given rise to a more generous assessment of quantum by his Honour. 131 The solicitor for Mr Walker filed four pages of written submissions again in line with the primary judge's comments, although not in affidavit form. In summary, those submissions asserted that the costs sought were excessive, pointing in particular to the departure from Parts 1 and 2 of Schedule 1 of the Federal Circuit Court Rules 2001 (Cth), as applied unless a contrary order is made under r 21.10. The submissions applied those provisions to arrive at a figure of $14,162.17, and argued for further deductions from that figure based on actual claimed expenditure by the respondent. The submission also argued that even outside Schedule 1 the costs sought were excessive, referring to a lack of information in relation to the incurring of said costs. 132 The primary judge adopted the amount permitted by Schedule 1 identified in Mr Walker's submissions and ordered him to pay Mr Sell $14,162.17. It was open to his Honour to reach that conclusion, and to do so irrespective of any further material that might have been placed before his Honour. 133 In seeking to overturn the primary judge on costs, written submissions for Mr Sell contended that he did not have an opportunity to resubmit an application for costs in the correct form in the Court below and as such was denied procedural fairness. Reliance was placed on s 172 of the Legal Profession Uniform Law (NSW). Reference was made to the additional evidence sought to be relied upon, and in particular upon a letter of compromise dated 1 July 2015, noting also that rr 1.32, 1.34 and 1.35 of the Federal Court Rules 2011 (Cth) allowed this Court to make any order it believes to be in the interests of justice, to waive compliance with any of the Rules and to make an order inconsistent with those Rules. It was submitted that it was in the interests of justice to waive formalities and to encourage parties to settle proceedings, especially at an early time to reduce costs. In the alternative, it was submitted that a later offer of compromise of 30 July 2015 should be applied. 134 Written submissions for Mr Walker pointed out that Mr Sell was seeking to rely on evidence and arguments that were not advanced in the Court below. Mr Emmett submitted orally for Mr Walker that the application for fresh evidence was not relevant for the cross-appeal, because it was not material before the primary judge and therefore cannot have been any basis for error on the part of his Honour. Put simply, there cannot be any error in the exercise of discretion as to costs when the material his Honour was effectively said to have disregarded was not before him. Mr Emmett relied on Sobey v Nicol and Davies [2007] FCAFC 136; (2007) 245 ALR 389 at 403-4 [68]-[72], which states the principle limiting the use of fresh evidence on appeal, and Li Pei Ye v Crown Limited [2004] FCAFC 8 at [157]-[158] to the effect that further evidence should not be admitted on appeal if it was available or could reasonably have been obtained at the time of hearing. Mr Emmett submitted that the restrictions imposed by the primary judge did not in any event preclude placing the offer of compromise before his Honour. 135 In response, Mr Chandrasegaran orally submitted that the cases relied upon above were distinguishable because in those cases there had been an opportunity to tender the evidence in question. However he quite properly conceded that the primary judge had not expressly forbidden furnishing the offer of compromise. It is not at all clear that this would necessarily have made any difference in any event. 136 It does not appear to me that the genuineness of the costs and expenses incurred was truly in issue, rather than a proper basis being advanced for the extent of those outlays being paid by Mr Walker as being in excess of the ordinary scale. It is unfortunate that the restrictions imposed by way of a preference expressed by the primary judge, not reflected in the formal orders made, led to the offer of compromise in particular not being before his Honour. However, that was available at the time, it was not before his Honour and accordingly there cannot be any error in failing to have regard to it, let alone any certainty that it would have produced a different result. I am unable to discern any error in the exercise of the discretion by his Honour in the determination of Mr Sell's costs application. 137 It follows that the interlocutory application to adduce further evidence in support of the cross-appeal must be dismissed; and the cross-appeal must be dismissed, both with costs.

Conclusion 138 The appeal is dismissed with costs. The respondent/cross-claimant's interlocutory application and cross-appeal are dismissed with costs. I certify that the preceding one hundred and thirty-eight (138) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bromwich.