Jattan v Drivesmart Suva Ltd [2015] FJHC 900; HBC262.2006S (18 November 2015)

IN THE HIGH COURT OF FIJI AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO. HBC 262 OF 2006S

BETWEEN:

RAMESH SHIU JATTAN
PLAINTIFF

AND:

DRIVESMART SUVA LIMITED
DEFENDANT

COUNSELS : Mr Naidu R for the Plaintiff
: Mr Singh S for the Defendant

Date of Hearing : 1st, 2nd& 3rd April, 2014
Date of Judgment : 18th November, 2015

JUDGMENT

Introduction

[1] The Plaintiff purchased a used Nissan Terrano 4 –wheel -drive vehicle (SUV) from the Defendant for a sum of $35,000.00 on 25th January, 2006 and after using it for some time, a 'guide light' on the panel of indicators started blinking and the Plaintiff had taken the vehicle to the Plaintiff and they had told him it was relating to gear box lubricant and that since they had changed the oil, the issue was solved. But after sometime, the light re-appeared, with a loud sound from the gear box. The Plaintiff complained to the Defendant and after repair the motor vehicle was returned to the Plaintiff, but soon it n started to make a loud noise from the gear box. The vehicle was returned and according to the Plaintiff it took a while this time for the Defendant to repair and when the Plaintiff was informed of the alleged completion of the repair he insisted having it inspected by the local agent of the Nissan vehicles, and also requested for an extension of warranty. The Defendant did not accede to the said request of inspection report from the local agents, but had informed the Plaintiff in writing that 3 month warranty can be granted from the said replacement of gear box. The Plaintiff did not take possession of the vehicle and asked for the price paid. The vehicle remained with the Defendant and this action was instituted on 22nd June, 2006, approximately one month before the replacement of gear box with a Japanese second hand gear box.

Facts

[2] The following facts were admitted:

[a] The Defendant carried on and has at all material times carried on business as a motor vehicle dealer.

[b] On the 25th January, 2006 the Plaintiff purchased from the Defendant a Japanese second hand Nissan Terrano Registration No EY 095(hereinafter stated as the motor vehicle) for a sum of $35,000.00.

[c] The motor vehicle was under a statutory warranty for 3 months or 6000km whichever came first.

[d] On or about 22nd February,2006 the Plaintiff delivered the motor vehicle to the Defendant as the Plaintiff was experiencing some problems with the engine of the motor vehicle.

[e] The Plaintiff drove the motor vehicle last on 18th March, 2006 when he again experienced some problems with the engine of the motor vehicle and there was a breakdown. The Plaintiff informed the Defendant of this problem and the Defendant took the motor vehicle for repairs. Thereafter the motor vehicle remained in the possession of the Defendant until 28th July, 2006 when the solicitors for the Defendant wrote to the Plaintiffs solicitors and advised that the motor vehicle had been repaired and was ready for collection. (see the minutes of the pre-trial conference)

[3] It is an admitted fact that the Defendant had made several attempts to repair the gear box of the vehicle and could not do so and finally it was replaced with a second hand gearbox imported after 18th March, 2006 from overseas. The only mechanic who gave evidence for the Defendant stated that there was defect in the gear box and the said defect could not be repaired.

[4] The Plaintiff's solicitors wrote a letter to the Defendant on 26th May, 2006 that the Plaintiff had purchased another vehicle for his personal use and he was no longer interested in the vehicle and requested for a full refund of $35,000.00.This action was instituted on 26thJune, 2006.

[5] In the statement of claim the Plaintiff states that the Defendant had represented the motor vehicle as free of any defects /problems and that it was as good as brand new and he had relied on that to purchase it.

[6] The Plaintiff further pleaded that the motor vehicle was not roadworthy at the time of the sale since as there were problems from February, 2006 and he had lost the enjoyment of the vehicle since 18th March, 2006.

[7] The Plaintiff also claims under Sections 54 and 55 of the Fair Trading Decree and states that the conduct of the Defendant amounts to misleading and deceptive conduct.

Analysis

[8] For the Plaintiff he gave evidence and for the Defendant, a Director and a mechanic of the Defendant who had repaired the motor vehicle, gave evidence.

[9] The Plaintiff stated that he was searching for a vehicle and he preferred a Nissan Terrano and the Defendant had the same type of vehicle with them. He said that a sales person had approached him and had shown some photographs and later he went to the place where it was parked before clearance. He said from the outward appearance it conformed to his requirements and at that time there was no battery to start the vehicle before clearance. When it was cleared after the payment of duties, charges, levies etc. by the Defendant, and taken to the Defendant's business premises he had visited the place and had test driven it and decided to purchase it for $35,000.00 after some negotiations with the Defendant's employees.

[10] The above facts were not disputed. The Plaintiff stated that the sales person told him that the vehicle was 'as good as new', but this fact was denied by the Defendant.

[11] The mileage on the odometer of the vehicle was low and at that time Nissan Terrano was a latest type of SUV. The Director of the Defendant, Navita Devi denied the named sales person involved with Defendant at the time of sales. According to her he had left the Defendant's employment, when the Plaintiff purchased the motor vehicle. Neither party called this sales person to give evidence to verify the truth of allegation.

[12] The Plaintiff was an educated person having knowledge to understand what a 'second hand' vehicle means. So he decided to purchase a second hand vehicle knowing the risks involved in such a product. In Bartlett v Sidney Marcus Ltd [1956] 2 All ER753 it was held that the two basic requirements of a second hand car were safety and being able to drive. This was stated in the judgment of Rogier J in Bernstein v Pamson Motors (Golders Green) Ltd - [1987] 2 All ER 220.

[13] Though several letters were exchanged between the parties prior to this litigation there were no such allegation of misrepresentation stated in any of the letters. It should also be noted that the letters written by both parties were lengthy and very descriptive but had failed to mention about this misrepresentation by the salesman, upon which the Plaintiff's first claim was made.

[14] Even when the Defendant's director, Navita Devi wrote to the Plaintiff that the motor vehicle was a second hand one and it ought to give 'trouble' the Plaintiff did not mention any assurance or misrepresentation by a sales person. The Plaintiffs letters were written by solicitors and it is unlikely that such a fact would have been missed till this action was filed. The allegation for misrepresentation appears for the first time in the statement of claim. If such a misrepresentation was made why this vital fact not brought to the notice of the Defendant by two solicitors who represented the Plaintiff needed explanation and there was none.

[15] The vehicle was purchased on 25th January, 2006 and on 13thApril, 2006 a letter was written by the previous solicitors for the Plaintiff and in this letter there was no indication of any misrepresentation, but has requested the vehicle to be repaired at no cost to the Plaintiff or to refund the money. The Defendant did not charge for the labour or parts replaced including the gear box.

[16] The said letter was marked as P6 and it contained in the agreed bundle of documents. The said letter further stated the general warranty on the engine and gearbox for 3 months and admittedly the 'trouble' had started within 3 months from the purchase date.

[17] The evidence of Navita Devi was that they wanted to keep the vehicle for a longer time after repair, in late February, 2006, but the Plaintiff had requested the vehicle to be released to him. This may be the reason that P5issued on 2nd March, 2006, contained statements such as:-

'Customer test drove vehicle-OK. Satisfied, and 'end of warranty on the vehicle'.

This note was written on 2nd March, 2006 and the statutory warranty remained till 25th of April, 2006 but the Plaintiff had admitted his signature on the said document. This indicates unilateral decision of the Plaintiff against the advice of the Defendant. If not, there was no reason for the Plaintiff to place his signature on such a document. Plaintiff was a senior customs officer and ought to have known the waiver of rights. Defendant is not relying on P5 and admits its obligations under the warranty given for the gear box.

[18] Navistar Devi stated that she was angry when the Plaintiff complained again after taking delivery of the vehicle on 2nd March, 2006 against their advice. She said that she wanted to keep the vehicle for few days to take it to the local agents to check the motor vehicle and this could not be done. She blamed the Plaintiff for not allowing to keep the motor vehicle for few days more.

[19] The Plaintiff had involved the Land Transport Authority (LTA) in order to get the Defendant for repair when the vehicle had a loud sound from the gearbox after 2nd March, 2006. Navita Devi did not accept the involvement of the LTA but P6 stated this fact and it was not denied. I accept the Plaintiff's version of this fact, on the balance of probability as this was corroborated in P6 and also considering the evidence of Navita Devi, who said that since she was 'angry' the complaint made after the delivery on 2nd March,2006 was not promptly attended. She had admitted that the Plaintiff had lodged a complaint to LTA, but according to her she was not questioned for the said complaint.

[20] To what extent LTA got involved was not clear, but the primary concern of the Plaintiff at that time was to get the vehicle repaired without any cost to him though he had signed P5 as 'end of warranty', and he was successful in that. (see the exhibit P6)

[21] The reply to the letter P6 was prompt and contained in 'agreed bundle of documents' and stated that the vehicle was a second hand one and cannot be considered as a new one. Even a new vehicle can sometimes create certain serious mechanical issues and a used vehicle does not carry comprehensive warranty similar to a brand new one. The statutory warranty in a second hand vehicle was limited to 3 months or 6000 km and the limited warranty only applied to engine and gear box.

[22] When the Defendant had indicated that 'problems' in a second hand vehicle was usual, the Plaintiff never said about alleged warranty of the sales person that the vehicle was 'as good as new'. So this allegation was not proved on the balance of probability. The Plaintiff argues that when the Plaintiff alleges such misrepresentation the obligation to call the said sales person was with the Defendant. He had relied on Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 and submitted that adverse inference could be drawn against the Defendant for not calling the said witness.

[23] I do not accept this position. In the proper analysis of the Plaintiff's evidence the fact of misrepresentation was not proved on the balance of probability. The burden of proof of a fact lies fairly and squarely on the Plaintiff and this should be on the balance of probability. The Plaintiff's allegation of misrepresentation has failed the test of spontaneity as it was not revealed in any of the written communications between the parties and in the analysis of Plaintiff's evidence this fact was not proved.

[24] When the Plaintiff was informed of the completion of the repairs by replacing the faulty gearbox with a second hand one on 28th July, 2006 this letter was nor replied till 18th September, 2006 indicating his lack of interest to accept the repaired vehicle. By this time this action was instituted. In the said reply the Plaintiff also requested a report of the motor vehicle's condition from the local agent from the Defendant. The Plaintiff could not insist on a report from the local agent of the vehicle brand, as it was a second hand vehicle and the statutory warranty does not cover such costs. At the time of purchase the Plaintiff did not obtain any report regarding the condition of the second hand vehicle.

[25] The only technical evidence of the defect in the motor vehicle was presented to the court by the Defendant. He said that he had specialized in the area of gear box of vehiclesand that he had examined the motor vehicle. According to him the fly- wheel of the gear box was broken and the sound came from the broken fly- wheel inside the gear box. This evidence was not refuted in any manner. So it is safe to assume the defect was in the gear box.

[26] The said mechanic further said breaking of a flywheel inside a gear box can occur due to several reasons but in this instance the reason was misalignment of a shaft inside the gear box. He said that when the gear box was opened he had observed misalignment of shaft and he recommended replacement of entire gear box, as that could not be repaired. He said that the vehicle was taken to the local agents for computer testing but could not locate the defect until the gear box was opened by him. He said he was not involved with the computer testing by the local agent and the vehicle was taken for such diagnostics by another employee of Defendant. This was before the replacement of gear box.

[27] There was a defect in the gear box and it was identified by the technician. The delay in the correct diagnosis can be due to that it was the first time for the technician to deal with gear box of that model. The more sophisticated systems employed by the local agents for the vehicle, could not identify the problem correctly. From the evidence presented to the court the Defendant had taken efforts to rectifythe defects but it had taken some time. First the Defendant had tried to find replacement of gear box locally but finally decided to import a second had gear box from Japan, through another trader.

[28] The Plaintiff stated that he was informed by a clerk of the Defendant that there were some defects in the gear box prior to the sale of the motor vehicle. According to the Plaintiff the said clerk was dead at the time of the trial. This was hearsay evidence. Even if his evidence is believed, it only proves that a third party had informed him of some issue in the gear box, but whether this issue was the same as misalignment of a shaft that was the root cause for the breaking of the flywheel could not be ascertained. The person who had told this was not a technician and was not involved in the technical aspects of a vehicle as he was a customs clerk of the Defendant. In those circumstances the Plaintiff has failed to prove the alleged knowledge of the Defendant regarding the misalignment of shaft in the gear box on the balance of probability. One has to be mindful of the time a second hand vehicle being idle, before and after arrival for sale and necessary servicing done in such instances to gear box, engine etc. There was no evidence as the root cause of misalignment of shaft and when it had happened.

[29] Lord Denning in Bartlett v Sidney Marcus Ltd[1956] 2 All ER753 after analysing the case law on 'merchantable quality' and 'implied conditions' in terms of the Sale of Goods Act, in relation to a second hand car held,

'It means that, on a sale of a secondhand car, it is merchantable if it is in usable condition, even though not perfect. This is very similar to the position under s 14(1). A secondhand car is "reasonably fit for the purpose" if it is in a roadworthy condition, fit to be driven along the road in safety, even though not as perfect as a new car.

Further,

Applying those tests here, the car was far from perfect. It required a good deal of work to be done on it; but so do many second hand cars. A buyer should realise that, when he buys a second hand car, defects may appear sooner or later; and, in the absence of an express warranty, he has no redress. Even when he buys from a dealer the most that he can require is that it should be reasonably fit for the purpose of being driven along the road. This car came up to that requirement. The plaintiff drove the car away himself. It seemed to be running smoothly. He drove it for four weeks before he put it into the garage to have the clutch repaired'. (emphasis added)

[30] The only express warranty in this instance was the statutory warranty and the Defendant had replaced the defective gear box with a second hand gear box specifically imported for the repair of this vehicle from another supplier.

[31] The motor vehicle that was purchased on 25th January,2006 was roadworthy as it was registered by the LTA which test the roadworthiness and it was used by the Plaintiff for nearly a one month when the sound from the gear box was observed. There was no evidence of any danger to passengers or the other users of the road from the said defect. From the evidence presented at the trial the motor vehicle was merchantable quality, considering the length of time it was used and also considering that it was a second hand vehicle imported from abroad. It was also an admitted fact that after inspection the Plaintiff had negotiated with the Defendant regarding the price of the vehicle. The Plaintiff also admitted that the price paid was substantially less compared to a new vehicle of that type at that time.

[32] In the circumstances the Plaintiff was not entitled to recessions the contract of sale of the motor vehicle and request for money paid for it.

[33] There was a statutory warranty for the gear box and the conditions of the said warranty and what were covered, clearly stipulated. This document was document No 1 of the agreed bundle of document. In terms of that no consequential damages were included. So no special or general damages could be made under this statutory warranty.

[34] The Plaintiff could not claim for damages for a warranty in terms of Sale of Goods Act (Cap 230) as there was no proof of the defect at the time of sale of the motor vehicle and it had developed after about one month of use. Hence no damage for statutory breach of warranty could be granted under the said Act. (see exhibit P5 written on 13th April, 2008)

[35] The Plaintiff had requested for a report of the vehicle from local agents and this is not covered under statutory warranty. He cannot insist on such a thing that was not included in statutory warranty in order to reject the motor vehicle that was repaired by the Defendant.

[36] The Plaintiff is also claiming in terms of Section 54 and 55 of the Fair Trading Decree. Section 54 of the Fair Trading Decree states as follows:

"54. Misleading or Deceptive Conduct.

[1] A person shall not, in trade or commerce engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

[2] Nothing in this Division shall be taken as limiting by implication the generality of subsection (1).

55. Unconscionable Conduct.

[1] A person shall not, in trade or commerce, in connection with the supply or possible supply of goods or services to a person (in this section referred to as the customer), engage in conduct that is, in all the circumstances, unconscionable.

[2] Without limiting the matters to which regard may be had for the purpose of determining whether a supplier has contravened subsection (1) in connection with the supply or possible supply of goods or services, regard may be have to –

(a) the relative strengths of the bargaining positions of the supplier and the customer;

(b) whether, as a result of conduct engaged in by the supplier, the customer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the supplier;

(c) whether the customer was able to understand any documents relating to the supply or possible supply of the goods or services;

(d) whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the customer (or person acting on behalf of the customer) by the supplier in relation to the supplier or a person acting on behalf of the supplier in relation to the supply or possible supply of the goods or services; and

(e) the amount for which, and the circumstances under which, the customer could have acquired identical or equivalent goods or services from a person other than the supplier.

[3] A supplier shall not be taken for the purposes of the section to engage in unconscionable conduct in connection with the supply or possible supply of goods or services to a customer only because the supplier institutes legal proceedings in relation to that supply or possible supply or refers a dispute or claim in relation to that supply or possible supply to arbitration.

[4] For the purpose of determining whether a supplier has contravened subsection (1) in connection with the supply or possible supply of goods or services to a customer –

(a) regard shall not be had to any circumstances that were not reasonably foreseeable at the time of the alleged contravention; and

(b) regard may be had to conduct engaged in, or circumstances existing before the commencement of this Decree.

[5] Any person who fails to comply or contravenes this section is guilty of an offence."

[37] The particulars for the alleged breaches under the Fair Trading Decree were contained in paragraph 10 of the statement of claim.

[38] There was no proof on the balance of probability, that the motor vehicle was not in a 'roadworthy condition' when it had been passed by LTA for roadworthiness, without any conditions attached to it.

[39] As I have discussed earlier, the Plaintiff failed to prove the prior knowledge of the Defendant relating to the defect in the gearbox. In fact there was no evidence that the said defect in the gear box was prevalent at the time of the sale.

[40] The Plaintiff had in fact negotiated the price and cannot now complain about the price he paid. There is no evidence that the Defendant had taken advantage of the Plaintiff in this instance. The Plaintiff had already decided to purchase the model of the motor vehicle even before any representation was made by the Defendant's sales person. The Plaintiff had tested driven and also negotiated the price with the Defendant before purchase.

[41] The technician who examined the vehicle also explained the difficulty in the diagnosing the problems in the gear box. This technician has now left the Defendant. If the problem was known it is unlikely that they would behave in such a manner as explained by the said technician.

[42] According to the only technical evidence presented the defect was in the gear box and it was replaced by a second had gear box imported from overseas. Since the defect was detected in the warranty period and the repair took some time the Defendant had indicated that it would extend the warranty period for further 3 months from the date of completion of the repair. This was informed to the Plaintiff even before the completion of the repair. Without realizing this fact the Plaintiff again asked for extension of warranty by 3 months in the letter written by the solicitors on 18th September, 2006.

[43] In my judgment the evidence presented to this court failed to prove breaches under Section 54 and 55 of the Fair Trading Decree on balance of probability.

Conclusion

[44] The Plaintiff had purchased a second hand motor vehicle for $35,000.00. He had examined it and also test driven before the purchase. He had also negotiated with the price after examining the vehicle. In his evidence he also indicated the knowledge of cost of such a vehicle as he is a customs officer who is accustomed with the duties, levies that are chargeable to such a vehicle when importing. He had also searched for a vehicle for some time before the purchase. He could not prove the claim for misrepresentation on balance of probability. By the same token the Plaintiff failed to prove breaches under Section 54 and 55 of the Fair Trading Decree. The statement of claim is struck off but considering the circumstances of the case I would not grant any costs.

Final Orders

[a] The statement of claim is struck off.

[b] No costs.

Justice DeepthiAmaratunga
High Court, Suva

Dated this 18thday of November, 2015.