Case: Rogers v Parish (Scarborough) Ltd [1987] QB 933
Outcome: approved
Subsection 66(2) of the TPA provides that goods are of merchantable quality if they are as fit for the purpose or purposes for which goods of that kind are commonly bought as is reasonable to expect having regard to: (1) any description applied to them by the corporation; (2) the price received for them; and (3) all other relevant circumstances. In a case such as this, the 'relevant circumstances' are likely to include the nature of the defect, its intractability, and its effect on performance: see, e.g., Bernstein v Pamson Motors (Golders Green) Ltd [1987] 2 All ER 220, at 227-228 per Rougier J; Crowther v Shannon Motors Co [1975] 1 WLR 30 at 33; and Jillawarra Grazing Co v John Shearer Ltd (1984) ATPR 40-441 at 45-089 per Toohey J. Goods that are not of merchantable quality are unmerchantable: see Rogers v Parish (Scarborough) Ltd [1987] QB 933 (" Rogers v Parish ") at 946 per Woolf LJ and Courtney v Medtel Pty Ltd (2003)126 FCR 219 (" Medtel ") at 264 per Sackville J; appeal allowed in Medtel Pty Ltd v Courtney [2003] FCAFC 151 ; (2003) 130 FCR 182 but not on this point. Medtel concerned s 74D of the TPA, but its discussion of 'merchantable quality' is relevant in the present context. 32 Rogers v Parish provides some limited guidance as to an appropriate approach in this context because it too concerned a road vehicle, although not a heavy commercial vehicle. Although roadworthy, the vehicle in question, a Range Rover, misfired at all road speeds, had excessive noise emitting from the gear box and substantial defects in the body work. The judge at first instance held that the vehicle was of merchantable quality because it was roadworthy and capable of proceeding from one place to another. This finding was set aside on appeal. Mustill LJ said at 944: Starting with the purpose for which 'goods of that kind' are commonly bought, one would include in respect of any passenger vehicle not merely the buyer's purpose of driving the car from one place to another but of doing so with the appropriate degree of comfort, ease of handling and reliability and, one might add, of pride in the vehicle's outward and interior appearance. What is the appropriate degree and what relative weight is to be attached to one characteristic of the car rather than another will depend on the market at which the car is aimed. 33 Plainly enough, the purpose for which a commercial vehicle of this kind is commonly bought would include the purpose of being used to transport heavy loads of goods over long distances interstate safely, reliably and efficiently. The loads carried by the truck in this case were not said to be other than within the common range. Indeed, Mack conceded that the interstate long distance haulage of loads of the kind allegedly carried by the truck in the course of the Lowes' business was a "purpose for which trucks, such as the Lowe truck in question, would commonly be utilised". Thus, the first issue to arise under s 71(1) was not in dispute. 35 In this connection too, the observations of Mustill LJ, in Rogers v Parish at 944, though apropos a different kind of vehicle, are helpful: To identify the relevant expectation one must look at the factors listed in the subsection. The first is the description applied to the goods. In the present case the vehicle was sold as new. Deficiencies which might be acceptable in a secondhand vehicle were not to be expected in one purchased as new. Next, the description 'Range Rover' would conjure up a particular set of expectations, not the same as those relating to an ordinary saloon car, as to the balance between performance, handling, comfort and resilience. The factor of price was also significant. At more than 14,000 [pounds] this vehicle was, if not at the top end of the scale, well above the level of the ordinary family saloon. The buyer was entitled to value for his money. With these factors in mind, can it be said that the Range Rover as delivered was as fit for the purpose as the buyer could reasonably expect? The point does not admit of elaborate discussion. I can only say that to my mind the defects in engine, gearbox and bodywork, the existence of which is no longer in dispute, clearly demand a negative answer. 36 The critical question is whether the applicants' truck suffered from some or all of the defects the applicants allege. The outcome of the case very much depends on the answer to this question. For this reason, in this case, s 71(1) and (2) give rise to substantially the same question. 37 Mack accepts that the applicants made it known to it that they were acquiring the truck for interstate long-haul goods transport. This entitles them to rely on s 71(2), as well as s 71(1). Indeed, Mack accepts that it assured them that the truck was fit for this purpose. It is common ground, therefore, there was an implied condition under the contract for supply that the truck was at the time of supply reasonably fit for this purpose. As noted, Mack did not seek to argue at trial that s 71(2) was unavailable to the applicants because they did not rely on Mack's skill and judgment or the skill and judgment of Mr Kumnick. 38 Although the notion of reasonable fitness for purpose is not precisely the same as the concept of merchantability, in this case there is no significant difference. There is here an overlap in the operation of s 71(1) and (2) and, under both, the real question is whether or not the truck was fit for the purpose of interstate long-haul goods transport. At trial the applicants and Mack accepted that this was so, and the applicants relied on the same facts to demonstrate a failure on Mack's part to meet both s 71(1) and (2). 39 Of course, even if the applicants establish that the truck was not fit for the purpose of interstate long-haul goods transport, there is a further question whether or not they are entitled to the relief they seek. 40 As already noted, besides their unmerchantability or unfitness for purpose claim, the applicants also retained a limited claim under s 52 of the TPA. This was to the effect that Mack's representations (via its salesman, Mr Kumnick) that: &#8226; the truck would provide safe, reliable and efficient service for at least 800,000 kilometres; and &#8226; driving the truck was like driving a car were misleading and deceptive, or likely to mislead or deceive, in contravention of s 52 of the TPA. As it happened, there was no great dispute as to whether Mr Kumnick made these statements to the applicants. Mr Kumnick admitted making the second statement and that he said something like the first. Thus, in an affidavit sworn before trial, he said that he told Mr Lowe that the truck should prove to be "safe and reliable" for about 800,000 kilometres. He also told Mr Lowe that the truck would be ideally suited for his purpose of interstate haulage. Mr Kumnick emphasized that he made this latter statement and the observation that the trucks "drive like cars" in the context of talking to an experienced heavy vehicle driver. 41 Section 52 of the TPA prohibits a corporation from engaging in conduct in trade and commerce that is misleading or deceptive, or that is likely to mislead or deceive. The words "engage in conduct" include the making of representations about a past, present or future matter. It is not in issue that, for the purposes of s 52 of the TPA, the respondent is a corporation engaged in trade and commerce.