The Supreme Court of New South Wales was asked to consider whether representations relating to the capabilities of the Hardi Presidio 2700, a heavy-duty row crop self-propelled sprayer used for mixed farming activities were misleading or deceptive.
- Did the defendant engage in misleading or deceptive conduct for the purpose of sections 18 and 29 of the Australian Consumer Law (ACL)?
- Did the defendant’s representations induce the representative plaintiffs to purchase a Presidio?
- Did the representative plaintiffs establish loss was suffered for the purpose of section 236 of the ACL?
The first plaintiff, Greenshades Pastoral Co Pty Ltd (Greenshades), brought the proceedings as representative proceedings under Part 10 of the Civil Procedure Act 2005 (NSW), and as a representative of a closed class of eight parties who purchased a Hardi Presidio 2700 (Presidio) between 1 April 2013 and 1 December 2018 (the Group Members).
The Group Members claim they purchased the Presidio based on certain misleading and deceptive representations made by the defendant, Hardi Australia Pty Ltd (Hardi)and falling within the following categories:
- The strength of the Presidio chassis (the Chassis Representations);
- The four-wheel drive capabilities of the Presidio (the 4WD Representations); and
- The braking capabilities of the Presidio (the Braking Representations).
One of the Group Members, namely Ritter Investments Pty Ltd (Ritter) made an additional allegation of misleading and deceptive conduct concerning the operation of the Presidio spray rate controller (the Spray Controller Representations).
The decision at trial
The Supreme Court of New South Wales held that Hardi engaged in misleading or deceptive conduct in relation to the marketing and advertising of the Presidio under sections 18 and 29 of the ACL.
Specifically, based on expert evidence provided by an agricultural engineer and mechanical engineer, that the Court concluded:
- Structural cracking experienced by the Group Members indicated the Presidio was not “rugged and built for demanding conditions”, did not have “optimised design strength” and did not have a “heavy duty chassis” and, therefore, the Chassis Representations were misleading or deceptive;
- The Presidio’s transmission system did not cause power to be supplied to all four wheels at all times and therefore, the 4WD Representations were also misleading or deceptive;
- Finally, the Group Members did not establish the Braking Representations and Spray Controller Representations were misleading or deceptive.
Having established the Chassis Representations and the 4WD Representations were misleading or deceptive, the Court then considered what loss flowed from those representations. The relevant Group Members contended they were entitled to recover the purchase price paid for the Presidio, the loss of resale value and loss of income.
As to their entitlement to recover the purchase price paid for the Presidios, the relevant Group Members asserted that, in the absence of the Chassis Representations and 4WD Representations, they would not have purchased the Presidio. However, the evidence was silent as to the relevant counterfactual. That is, what the relevant Group Members would have done had they not purchased the Presidio. The Court observed that all relevant Group Members had used (and continued to use) the Presidio on their respective properties (notwithstanding the identified shortcomings). In those circumstances, his Honour concluded that, for the plaintiffs to establish an entitlement to recover any portion of the purchase price paid, they must show that either they could and would have purchased (for the same price) a 4WD self-propelled crop sprayer that did not have the identified shortcomings or, alternatively, the Presidios were worth less than the purchase price paid because of the shortcomings. No evidence was tendered in relation to those issues.
His Honour also concluded there was no relevant evidence tendered in relation to the alleged loss on the resale value of the Presidios or the alleged loss of income.
In the circumstances, his Honour concluded the relevant Group Members had not established any recoverable loss.
Implications for you
This decision is a useful reminder for parties who believe they have been a victim of misleading or deceptive conduct to carefully consider what loss they have actually suffered as a result of that conduct before deciding whether to bring proceedings. It is not sufficient to prove the representation and the reliance, the parties must adduce evidence that loss and damage has flowed because of the conduct.