Greenshades Pastoral Co Pty Ltd v Hardi Australia Pty Ltd

1. [1]

   The first plaintiff, Greenshades Pastoral Co Pty Ltd, owns a property at Wallendbeen, New South Wales (the “Greenshades Property”), on which it conducts mixed farming activities.

2. [2]

   The second plaintiff, Ritter Investments Pty Ltd, owns a property at Mount Tyson in Queensland, on which it conducts strip farming; growing wheat, barley and other crops.

3. [3]

   The defendant, Hardi Australia Pty Ltd, imports, designs and manufactures agricultural equipment in Australia. One of those products is a self-propelled sprayer known as the “Hardi Presidio 2700”. I will refer to it simply as the “Presidio”. Hardi marketed and sold the Presidio through a dealer network across Australia using print and video advertising.

4. [4]

   Below is a picture of the Presidio:

5. [5]

   Greenshades brings these proceedings as representative proceedings under Pt 10 of the Civil Procedure Act 2005 (NSW) in its own right and as a representative of a closed class of eight parties who purchased a Presidio between 1 April 2013 and 1 December 2018 for use in farming activities (the “Group Members”).

6. [6]

   Greenshades, and the Group Members, claim that they purchased the Presidio based on representations made by Hardi in print and video form concerning:

7. [7]

   Ritter Investments is a Group Member, but in addition to the claims made by Greenshades on behalf of the Group Members, makes a separate claim concerning the manner in which the spray rate controller on the Presidio operated (the “Spray Rate Controller Issue”). No other Group Member makes that claim.

8. [8]

   Greenshades, on behalf of the Group Members, alleges that the representations made by Hardi concerning the Chassis Issue, the 4WD Issue and the Braking Issue were misleading or deceptive for the purpose of ss 18 and 29 of the Australian Consumer Law. [1] Ritter Investments alleges that the representations made in respect of the Spray Rate Controller Issue were also misleading or deceptive.

9. [9]

   A claim hitherto brought by Greenshades and Ritter Investments in negligence was abandoned at the outset of the hearing.

10. [10]

    In the Third Further Amended Statement of Claim, filed with leave during the course of the hearing, the claims of misleading or deceptive conduct were put this way:

The common questions

1. [11]

   The Third Further Amended Statement of Claim poses a number of common questions.

2. [12]

   Greenshades and Ritter Investments, and Hardi, have made submissions concerning the four issues I have identified at [6] and [7] above and as to how, in the light of those submissions, the common questions should be answered.

3. [13]

   The course I propose to follow is to make findings about the four issues, and then invite submissions as to how, in the light of those findings, the common questions should be answered.

4. [14]

   The common questions are set out in the attachment to these reasons. Common Questions (126658, pdf)

Reliance, loss and damage

1. [15]

   There was debate as to whether it was necessary that Greenshades and Ritter Investments make out their entire case, including as to reliance and loss, at this hearing.

2. [16]

   In Greenshades’ and Ritter Investments’ opening written submissions it was stated:

3. [17]

   During his oral opening, Mr Muddle SC, who appeared with Mr Hopkins for Greenshades and Ritter Investments [3] said:

4. [18]

   But there has been no order for a separate determination of the question of Greenshades’ and Ritter Investments’ reliance or loss. Indeed, both Greenshades and Ritter Investments adduced evidence of reliance and loss in the affidavits of Mr Stephen Hicks, a director of Greenshades, and Mr Gavin Ritter, a director of Ritter Investments. Further, until Mr Muddle’s opening submissions, the plaintiffs brought a case in negligence, which necessarily involved the establishment of loss. Nor has there been an order for the separate determination of the common questions. The matter was allocated a hearing date on 9 April 2021 when Hammerschlag J simply made the Usual Order for Hearing. They were the orders then sought by the parties. Greenshades did not then seek any order concerning common questions. On 25 March 2022 Ball J granted Greenshades leave to file a Further Amended Statement of Claim and ordered that the questions identified in an annexure to Greenshades’ solicitor’s affidavit of 16 March 2022 be “the common questions for the purpose of the hearing of these proceedings”. No order was made, nor sought, that those questions be separately determined.

5. [19]

   In closing written submissions, Dr Higgins SC, who appeared with Ms Hillman and Mr Sharma for Hardi, [4] made detailed submissions as to why it was necessary that the plaintiffs’ reliance on loss and damage “must be proved at this trial”.

6. [20]

   Those submissions included:

7. [21]

   Although Mr Muddle’s closing written submissions maintained the position set out at [16] and [17], in oral reply submissions he did not dispute that it was necessary for the plaintiffs to establish their entire case in these proceedings. Indeed, Mr Muddle directed submissions to those questions, and did not refer to, or contest Hardi’s “must be proved at this trial” submission.

8. [22]

   Greenshades and Ritter Investments must make out their entire case at this hearing, including as to reliance, causation and loss.

9. [23]

   Once the common questions are answered, the remaining Group Members will have to establish reliance, loss and damage in the usual way.

The Representations

1. [24]

   The Representations on which Greenshades and Ritter Investments rely were made in one or more of six brochures published by Hardi (the “Brochures”), advertisements published by Hardi in agricultural farming magazines (the “Advertisements”) and YouTube videos (the “Videos”).

2. [25]

   Greenshades and Ritter Investments allege that the Brochures contained representations [5] that the Presidio:

3. [26]

   The Videos:

4. [27]

   The print Advertisement repeated the statement that the Presidio had 4WD hydrostatic transmission.

Greenshades’ experience with the Presidio

1. [28]

   Greenshades’ operations are conducted by Mr Hicks, to whom I have referred, and his wife Ms Rosalyn Crawford. Both are experienced farmers and graziers. Mr Hicks has been farming, with occasional breaks, since 1981; over 40 years.

2. [29]

   Mr Hicks has previously used four tractors, each of which was a “front wheel assist” or “FWA” tractor.

3. [30]

   In relation to those FWA tractors, Mr Hicks said:

4. [31]

   Mr Hicks said that he started looking around to purchase a sprayer in about October 2016.

5. [32]

   He then approached Carruthers Machinery Co (from whom Greenshades had earlier purchased tractors) to enquire about the Presidio, as well as a competitor product.

6. [33]

   Mr Hicks spoke to “Bruce”, the sales manager at Carruthers in Cowra, who said:

7. [34]

   Mr Hicks said that “this piqued my interest and I chose to investigate the Presidio as an option as opposed to the other units.”

8. [35]

   Mr Hicks then watched two videos in relation to the Presidio and read one of the brochures provided by the dealer.

9. [36]

   A short time later Bruce said to Mr Hicks, of the Presidio:

10. [37]

    Mr Hicks said that “Bruce alleviated my concerns and I began to crunch some numbers.”

11. [38]

    The dealer then provided Mr Hicks with a quote dated 15 December 2016 which described a number of aspects of the Presidio including:

12. [39]

    The purchase price of the Presidio, including GST and taking into account a trade in, was stated to be $235,950.

13. [40]

    In his first affidavit Mr Hicks said:

14. [41]

    However, in cross-examination, Mr Hicks gave this evidence:

15. [42]

    Thus, Mr Hicks’ understanding was that the Presidio Greenshades was to purchase was a “FWA” or “front wheel assist”.

16. [43]

    As I have set out, Greenshades already owned a number of front wheel assist vehicles.

17. [44]

    Dr Higgins submitted that this evidence showed that Mr Hicks “was proceeding on the basis that the Presidio was a FWA and was not relying on any earlier statements in Hardi’s promotional material to the effect that the Presidio had a 4WD hydrostatic transmission.”

18. [45]

    I do not think this is a fair reading of Mr Hicks’ evidence.

19. [46]

    Mr Hicks said that having read the quote it was “obvious” that the Presidio was “front wheel assist” and that “I’ve read the brochure”.

20. [47]

    That suggests that Mr Hicks’ state of mind was that “FWA” was equivalent to “4WD”; as it is, in the sense that both kinds of vehicles can be operated with power driven to all four wheels.

21. [48]

    Dr Higgins did not pursue the matter with Mr Hicks and did not suggest to him that “FWA” was inconsistent with “4WD”.

22. [49]

    After Mr Hicks received the quote, he arranged for Greenshades to place an order for the Presidio from the dealer.

23. [50]

    In February 2019, the dealer, and a representative from Hardi, attended the Greenshades property to deliver the Presidio.

24. [51]

    Mr Hicks signed and initialled warranty documentation, albeit without reading it.

25. [52]

    In April 2017, Greenshades’ Presidio became bogged.

26. [53]

    Mr Hicks described the circumstances as follows:

27. [54]

    Although Mr Hicks did not depose to any other occasions on which the Presidio was bogged, he gave this evidence:

28. [55]

    Mr Hicks was not cross-examined to suggest that on either of these occasions he was driving the Presidio carelessly or incompetently; nor to suggest that the particular terrain into which he drove the Presidio on these occasions was out of the ordinary or otherwise that might reasonably be expected when crop spraying.

29. [56]

    From July or August 2018, Mr Hicks noticed cracking in various parts of the Presidio chassis. He also said he experienced a problem with the foot brake, when the Presidio was used in steeper country.

30. [57]

    Mr Hicks has continued to retain and use the Presidio. He used it until sometime in 2020, four years after its purchase, and resumed using it “last month”.

31. [58]

    Thus, he gave this evidence in cross-examination:

32. [59]

    Although Mr Hicks here said he had not used the Presidio for “the last two years” because of “safety concerns”, he did not suggest that the Presidio did not function adequately when he did use it, including during “the last month”. The matter was not taken up in re-examination. Evidently, Mr Hicks continued to use the Presidio for some time after it got bogged in April 2017 and after it lost traction in July 2019. He did not suggest he had had any other difficulties with the Presidio’s 4WD functionality during that period. And although he said he “purchased a replacement machine”, the cost of that machine does not form any part of Greenshades’ damages claim. I return to this below.

Ritter Investments’ experience with the Presidio

1. [60]

   Mr Ritter was born and raised on Ritter Investments’ property which has been in the Ritter family since the 19th century.

2. [61]

   Mr Ritter has been a part of the farming operation on the property since 1992.

3. [62]

   During that time, Ritter Investments conducted spraying operations using a 2WD self-propelled sprayer.

4. [63]

   Mr Ritter first read a brochure in relation to the Presidio in 2013 when he attended a “Farm Fest” where he was shown a Presidio and told by a representative of Hardi that “this machine is 4WD”.

5. [64]

   Mr Ritter said:

6. [65]

   Mr Ritter said he read the “2013 Brochure” and that the Presidio appealed to him “as having both 4WD and a precise rate controller greatly increased the efficiency of our sprays”.

7. [66]

   However, Mr Ritter said:

8. [67]

   Thereafter, Mr Ritter read an article in a journal “Trade Farm Machinery”, viewed one or other of the Videos and by June 2016 became interested in the possible purchase by Ritter Investments of a Presidio.

9. [68]

   In June 2016, Mr Ritter and his father attended a dealership in Dalby and was shown a demonstration Presidio.

10. [69]

    During his negotiations with the dealer Mr Ritter said:

11. [70]

    In about July 2016 the dealer called in to the farm to discuss the plumbing for the spray boom on the Presidio and said:

12. [71]

    The plumbing carried out by Seris (QLD) Pty Ltd evidently entailed significant modification including the disassembly and removal of all existing stainless steel spray lines and plumbing from the Presidio, at a cost of $6,050.

13. [72]

    The Presidio was delivered to the Ritter Investments property on 27 November 2016, following installation by Seris of the revised plumbing.

14. [73]

    Mr Ritter also instructed the dealer to install on the Presidio a Trimble GPS screen that Ritter Investments was then using on other machinery.

15. [74]

    Thus, Mr Ritter gave this evidence:

16. [75]

    Mr Ritter said that the Ritter Investments’ Presidio became bogged on one occasion.

17. [76]

    Thus, in his affidavit he said:

18. [77]

    Mr Ritter did not say when this incident occurred.

19. [78]

    Like Mr Hicks, Mr Ritter was not cross-examined about the particular circumstances of this incident. It was not suggested to him that he was driving otherwise than carefully or that he was using the Presidio in terrain for which it was not suited.

20. [79]

    Like Mr Hicks, Mr Ritter deposed to noticing cracking in the Presidio chassis. He also deposed to spraying issues, to which I will return.

21. [80]

    Mr Ritter did not say that Ritter Investments has ceased to use, or has disposed of, the Presidio. It is common ground that I should infer from this that Ritter Investments has not disposed of it, and still has it available to use.

The Chassis Issue

1. [81]

   Relevantly to this issue, the Presidio was advertised as:

2. [82]

   As I have said, Mr Hicks and Mr Ritter observed cracking in the chassis of the Greenshades’ and Ritter Investments’ Presidios.

3. [83]

   Greenshades and Ritter Investments retained Mr Richard Sulman to examine the Presidios purchased by the Group Members and provide expert evidence in relation to this aspect of the case.

4. [84]

   Mr Sulman has qualifications in agricultural engineering.

5. [85]

   Mr Sulman stated that eight of the nine Presidios purchased by Group Members had multiple metal fatigue fractures, which had been found after less than 100 hours of operation.

6. [86]

   In concurrent evidence, Mr Sulman said:

7. [87]

   A short time later, Mr Sulman gave this evidence, initially in response to a question from Dr Higgins:

8. [88]

   Hardi’s CEO, Mr William Franklin, agreed that “a handful or so” of the Presidios sold in Australia had experienced structural cracking. Hardi’s National Service and Quality Assurance Manager, Mr Desmond Ramsey, agreed that he was aware that a number of the Presidios had experienced structural cracking.

9. [89]

   Hardi retained Dr Ray Hope, a mechanical engineer, to give expert evidence about this aspect of the case.

10. [90]

    Dr Hope did not inspect any of the Presidios.

11. [91]

    The chassis of the Presidio was manufactured in France by Preciculture SAS.

12. [92]

    Mr Sulman expressed the opinion that the reason for the metal fatigue failures was that Hardi, having imported the Presidio chassis from France, had then made modifications which added substantial weight to the Presidio and thus caused it to be overloaded.

13. [93]

    There is no dispute that Hardi did modify the Presidio by adding a walkway and adding larger spray booms.

14. [94]

    Thus, on 29 May 2012, Mr Denis Lestradet, the “Directeur de Site” at Preciculture, wrote to Mr Franklin and Mr Ramsey: [9]

15. [95]

    However, it does appear that Mr Sulman may have expressed his opinion based on a misapprehension of Preciculture’s rated structural capacity of the Presidio tractor frame.

16. [96]

    It is common ground that a “PTAC” value of 9,900 kg was stamped on the compliance plate of all the Presidios. Mr Sulman concluded that this was the maximum weight limit authorised by Preciculture at the time of manufacture.

17. [97]

    On the other hand, Dr Hope concluded that the rated structural capacity of the Presidio tractor frame was 12,500 kg. Dr Hope based this conclusion on the relevant page of the Preciculture User and Service Manual which appears to state that the maximum axle load for the chassis is 12,500 kg.

18. [98]

    However that may be, the fact remains that, consistently with the evidence of Mr Hicks and Mr Ritter, the Presidios inspected by Mr Sulman have the structural cracking identified in the evidence.

19. [99]

    Dr Hope opined that factors other than overloading of the chassis might explain the structural cracking. Dr Hope nominated incomplete welding, porosity in the welding or possible “misuse” as potential reasons for the cracking.

20. [100]

    However, as to welding, Mr Sulman said that the cracking he observed was not merely at the welding joints. Thus, he gave this evidence:

21. [101]

    Mr Sulman also said that he saw no sign of misuse of the machines. Thus, he gave this evidence:

22. [102]

    As this evidence is based on what Mr Sulman observed in relation to the Presidios in question, and as Dr Hope did not inspect the machines, I see no reason why I should not accept it.

23. [103]

    Further, Dr Higgins did not, in cross-examination, suggest to either Mr Hicks or Mr Ritter that they drove their Presidios carelessly, or in any other way that might have caused the cracking that Mr Sulman observed.

24. [104]

    As I have said, the Presidios were advertised as being “rugged and built for demanding conditions” and as having “optimised design strength” and a “heavy duty chassis”.

25. [105]

    The question is what such a representation would convey to the class of consumers likely to be affected by the conduct in question: [11] in this case farmers considering purchasing expensive equipment (the Presidios’ purchase price was in the order of $300,000) for use in “applying agricultural chemicals to farmlands whilst traversing the same to control unwanted herbage and pests”. [12]

26. [106]

    Dr Higgins submitted that these representations “fall within permissible puffery and exaggeration”.

27. [107]

    That may be so in relation to the representation that the Presidios were “class leading”. It is hard to understand what precise message was being conveyed by this statement.

28. [108]

    However, I do not see that the statement that the Presidios were “rugged and built for demanding conditions”, had “optimised strength” and “had a heavy duty chassis” as being “permissible puffery and exaggeration”. Nor do I agree that, as Dr Higgins submitted, these representations conveyed no more than, at a high level, notions of strength and ability to withstand use.

29. [109]

    The class of persons to whom these representations were directed would, in my opinion, understand that the representation that the Presidios were “rugged and built for demanding conditions” with “optimised design strength” and with a “heavy duty chassis” as meaning that, in all reasonably foreseeable circumstances, the machines would not exhibit the fatigue cracking that Mr Sulman observed, particularly after relatively low hours of use.

30. [110]

    There is no suggestion in the evidence that Mr Hicks and Mr Ritter drove their Presidios otherwise than with reasonable care or in circumstances that it was reasonably foreseeable they would be used.

31. [111]

    The evidence thus establishes that the Presidio was not “rugged and built for demanding conditions”, did not have “optimised design strength” and did not have a “heavy duty chassis”. The representations made by Hardi that the Presidio had these qualities were misleading or deceptive.

The 4WD Issue

1. [112]

   In the Brochures and in the Videos, Hardi represented that the Presidio had:

2. [113]

   The question is what these representations would convey to a reasonable member of the class of persons to whom the representations were directed; [13] that is, experienced farmers contemplating the purchase of expensive machinery, in the order of $300,000, to apply agricultural chemicals to farmlands, while traversing the same to control unwanted herbage and pests.

3. [114]

   The representation that the Presidio had “4WD” was not subject to any limiting qualification. On the contrary, Hardi represented that power would be supplied “to the wheels”, that is to all four wheels, “when needed” and “regardless of the field conditions and slopes”.

4. [115]

   This representation was thus apt to convey to the farmers to whom it was directed that power would be supplied to all four wheels, at all times.

5. [116]

   Not only that, Hardi represented that the Presidio had two special features (the “intelligent electronics” and “traction control valve”) that would enhance the Presidio’s ability to apply power to all four wheels.

6. [117]

   The representation was not that the Presidio would “mostly”, or “usually” or (to adopt an expression that I suggested during argument) “in reasonably foreseeable circumstances” have 4WD functionality: it was that the Presidio would always have such functionality.

7. [118]

   Presidios do have 4WD functionality in that:

8. [119]

   But the Presidios do not have:

9. [120]

   The representations thus falsely conveyed that the Presidio’s 4WD functionality was enhanced by these features. The representations were misleading or deceptive to this extent.

10. [121]

    And, critically, there have been occasions when the Presidio’s transmission systems did not cause power to be supplied to all four wheels, and where one set of wheels spun freely resulting in no power at all being delivered to the other two wheels.

11. [122]

    As I have set out above, this happened to the Greenshades Presidio twice and to the Ritter Investments Presidio once.

12. [123]

    An example of a Presidio in this position is illustrated in the photograph below:

13. [124]

    The Presidio so pictured is not that of Greenshades or Ritter Investments, but of another Group Member, Mr Tony Good.

14. [125]

    I have not heard evidence from Mr Good at this hearing, but his communications about this incident, and those of Hardi responding to them, are in the Court Book in these proceedings.

15. [126]

    On 5 July 2016, Mr Good sent the image at [123] to Mr Ben Murray at South West Tractors with an email:

16. [127]

    Mr Murray passed Mr Good’s enquiry on to Mr Steven Lancaster, Hardi’s Product Manager, with the further enquiry:

17. [128]

    Mr Lancaster said in his affidavit:

18. [129]

    Mr Lancaster passed the matter on to Mr Jamie Tripodi, then Hardi’s Service Manager.

19. [130]

    On 11 July 2016, Mr Tripodi wrote to Mr Christophe Benoît at Hardi-Evard (evidently, Hardi’s French parent):

20. [131]

    Mr Benoît replied to both Mr Tripodi and Mr Lancaster on 12 July 2016:

21. [132]

    On 29 July 2016, Mr Tripodi wrote to Mr Murray:

22. [133]

    I am not presently hearing Mr Good’s claim against Hardi. I have set out the details of these communications simply to show that it appears that Preciculture’s position was that the circumstances concerning Mr Good’s Presidio, as reported to Mr Benoît by Mr Tripodi in his 11 July 2016 email, did not bespeak a “technical problem” in the Presidio. Rather, the Presidio had “reached its limit”, to adopt Mr Benoît’s expression.

23. [134]

    Mr Franklin’s internal response to Mr Lancaster, Mr Parker and Mr Tripodi on 19 August 2016 was:

24. [135]

    Leaving aside Mr Good’s experience, and Hardi’s reaction to it, Mr Hicks and Mr Ritter have experienced the Greenshades and Ritter Investments Presidios not operating as a 4WD vehicle. There were occasions when those Presidios did not provide power to all four wheels.

25. [136]

    The fact that this occurred on only limited occasions may be relevant to what loss Greenshades and Ritter Investments can show.

26. [137]

    But it is not relevant to whether the representation that the Presidio was always “4WD” was true.

27. [138]

    It was not.

28. [139]

    Both parties adduced expert evidence on this question, which included unhelpful observations by the experts about how 4WD is defined in dictionaries and technical publications. I have paid no attention to that evidence.

29. [140]

    The expert evidence did explain how it was that Presidios could cease to operate as 4WD.

30. [141]

    Thus, Mr Sulman and Dr Hope described the Presidio hydrostatic circuit design as follows:

31. [142]

    Mr Sulman and Dr Hope agreed:

32. [143]

    Mr Sulman and Professor John Fielke, a professor in mechanical engineering at the University of South Australia retained by Hardi to give expert evidence, agreed that, speaking generally:

33. [144]

    Critically, to the question of why the Presidios sometimes do not operate as 4WD, Mr Sulman and Professor Fielke agreed that:

34. [145]

    The experts agreed that the result is that when the rear wheels of the Presidio lose traction, no power is transmitted to the ground at the front wheels and they do not turn. The same is true in reverse if the front wheels lose traction.

35. [146]

    Mr Sulman conducted what he described as a “traction test”, using the Greenshades Presidio.

36. [147]

    Mr Sulman described his “traction test” as an “artificial method … devised to allow the Presidio to break traction in a controlled manner”.

37. [148]

    Mr Sulman said, in his report:

38. [149]

    By subjecting the Greenshades Presidio to this admittedly artificial test, Mr Sulman was able to create the circumstances that he and Professor Fielke referred to in their joint report in the passages I have set out at [143] above.

39. [150]

    Contrary to Dr Higgins’ submissions, I do not accept that Mr Sulman devised this test with the sole purpose of showing failure of the Presidio to operate as a 4WD vehicle.

40. [151]

    Rather, I think Mr Muddle was correct to submit that:

41. [152]

    Much attention was directed during the experts’ concurrent evidence to whether the manner in which a bogged Presidio, or a potentially bogged Presidio, was driven or operated could affect how it performed. This focused on whether the adoption of “appropriate driving techniques” (to use Dr Hope’s expression) could minimise or avoid the circumstances in which the Presidio ceased to operate as a 4WD vehicle.

42. [153]

    Thus, Mr Sulman and Dr Hope gave this evidence:

43. [154]

    Dr Hope’s statement as set out in the preceding paragraph reflected his evidence in his joint report with Mr Sulman:

44. [155]

    Dr Hope continued:

45. [156]

    On reflection, I find this evidence to be somewhat beside the point. The fact remains that Greenshades’ and Ritter Investments’ Presidios have become bogged with power lost to the unbogged wheels, albeit only on the limited occasions to which I have referred. Dr Higgins did not suggest to either Mr Hicks nor Mr Ritter that they were not using “appropriate driving techniques” or the “better driving techniques” to which Dr Hope referred, let alone that they were “intentionally using driving techniques to try to make the front wheels … slip and spin at very high speed”.

46. [157]

    Mr Sulman’s experiment shows that, to adopt Dr Hope’s words, “under certain conditions, machine settings, and driving methods, there are times when the power supplied to all four wheels is not able to be used by all four wheels and all four wheels do not rotate at the same time” and that “there are times when the power supplied to all four wheels is not able to be used by all four wheels”. Mr Hicks’ and Mr Ritter’s experience confirms that this can happen in a real world circumstance; albeit not often in their cases.

47. [158]

    My conclusion is that the representations made by Hardi about the Presidio being 4WD were misleading or deceptive.

48. [159]

    They were false in that they asserted the existence of the “intelligent electronics” and the “traction control valve” supplying “reliable power to the wheels regardless of the field conditions and slopes”; and were misleading or deceptive to that extent.

49. [160]

    They were also false, and thus misleading or deceptive because, as I have set out, sometimes power was not delivered to all four wheels.

50. [161]

    The Presidios were thus not always 4WD.

The Braking Issue

1. [162]

   Mr Sulman and Dr Hope agreed that the ladder circuit originally connected to the Presidio park brake circuit was a safety hazard, if it operated in the manner that Mr Sulman reported and needed to be disconnected and isolated from the park brake circuit.

2. [163]

   On the other hand, Dr Hope opined that he had tested a Presidio with an upgraded ladder control circuit, and it operated in a safe manner.

3. [164]

   In relation to the foot brake, Mr Sulman reported that applying full pressure when the machine was on a slope of 10 degrees, the braking was not sufficient to stop the machine.

4. [165]

   However, Dr Hope stated:

5. [166]

   Mr Muddle submitted, although without great enthusiasm, that these circumstances rendered misleading or deceptive the representations made in the Brochures that the Presidio was “built for demanding conditions” and was “class leading”.

6. [167]

   I cannot see how the matters identified in the evidence concerning braking could lead to that conclusion.

7. [168]

   As Mr Muddle accepted in closing oral submissions, this is “not going to be a major factor in this case”.

8. [169]

   I agree.

9. [170]

   Greenshades and Ritter Investments have not established that Hardi engaged in misleading or deceptive conduct in relation to the braking issue.

The Spray Rate Controller Issue

1. [171]

   As I have said, this issue arises only in relation to Ritter Investments. That is, neither Greenshades nor any other Group Member contends that it has had this problem.

2. [172]

   As I have set out above, in the Brochures Hardi represented that its “OnRate fluid system” “delivered precision application every time” and allowed the operator “to obtain the target rate through changing spraying speeds”. Other representations were made about the control of spraying.

3. [173]

   Mr Ritter said that in August 2017, while spraying wheat using the Presidio, he experienced “pressure fluctuation” from “1.5 to 7 bars”. He said that the:

4. [174]

   He continued:

5. [175]

   Mr Ritter said that on 3 March 2018 he was carrying out further spraying using the Presidio and that “the spray rate and pressure fluctuation were the same as before …”.

6. [176]

   Mr Sulman conducted what he described as detailed spray rate testing and reported “evidence of a sinusoidal disturbance at liquid flow rates below approximately one litre per second”.

7. [177]

   Mr Sulman and Dr Hope agreed that any “oscillations” occurred only at flow rates below one litre per second and agreed that “[a]t higher flow rates the spray rate controller performs at a reasonable level of accuracy”.

8. [178]

   Dr Hope expressed the opinion that Mr Sulman’s testing was “insufficient to show there is a problem with the spray rate controllers in general”.

9. [179]

   Dr Hope continued:

10. [180]

    Dr Hope’s evidence was not challenged during the concurrent evidence.

11. [181]

    During the concurrent evidence, Mr Sulman gave this evidence:

12. [182]

    A short time later, Mr Sulman gave this evidence:

13. [183]

    Earlier, Mr Sulman agreed that he knew that Ritter Investments had purchased its Presidio with “non-Hardi plumbing”.

14. [184]

    Thus, he gave this evidence:

15. [185]

    But later, in relation to the question of that plumbing, Mr Sulman gave this evidence:

16. [186]

    There were thus two potentially significant factors that may have played a role in causing the spray rate fluctuations to which Mr Ritter deposed, that were not taken into account by Mr Sulman; installation of the Trimble GPS and the revised plumbing installed by Seris.

17. [187]

    In those circumstances, while I have no reason to doubt Mr Ritter’s evidence as to his experience with spray rate fluctuations, nor Mr Sulman’s experimental results, I do not feel able to conclude that these matters are the consequence of some inherent defect in the Presidio itself. The fluctuations may have been preventable by making the adjustments to which Dr Hope referred. They may be because of the factors that Mr Sulman did not consider. Ritter Investments has not satisfied me that I should exclude these possibilities.

Reliance

1. [188]

   Mr Hicks gave evidence that, prior to Greenshades’ purchase of the Presidio, he was:

2. [189]

   Mr Hicks said that he was “set on getting the 4WD, high-clearance Presidio” and that:

3. [190]

   As I have set out above Mr Ritter said that the advertised features of 4WD and precise spray rate controller appealed to him.

4. [191]

   Neither Mr Hicks nor Mr Ritter gave evidence that they relied on anything Hardi said in its promotional material about the Presidio chassis strength (“rugged and built for demanding conditions”) or braking capacity.

5. [192]

   Otherwise, as the statements made by Hardi in its promotional material concerning the Presidio being a 4WD vehicle and, in Mr Ritter’s case concerning the spray rate, were evidently calculated to induce parties such as Greenshades and Ritter to purchase a Presidio, I am prepared to infer that they were in fact induced to do so by reason of those statements. [14]

Loss

1. [193]

   The loss for which Greenshades and Ritter Investments contend is: [15]

2. [194]

   Mr Muddle submitted:

3. [195]

   Assuming that the answer to this question is that Greenshades and Ritter Investments would not have purchased the Presidio, that cannot be the end of the inquiry. The further question arises as to what Greenshades and Ritter Investments would have done, had the alleged misleading or deceptive conduct not occurred. And if, as Mr Muddle submitted, part of the answer to that question is that they would not have purchased the Presidio, the further question arises: what would they have done?

4. [196]

   The evidence is silent on that topic.

5. [197]

   I took this matter up with Mr Muddle in closing submissions:

6. [198]

   Without knowing what Greenshades and Ritter Investments would have done had they not purchased a Presidio, I am not able to determine the loss they have suffered “because of” [16] the misleading or deceptive conduct I have found.

7. [199]

   The difficulty is particularly acute in this case because both Greenshades and Ritter Investments retain their Presidios and have used them, or had them available for use, for some six years. Their Presidios have lost power to the front wheels once or twice during that time and have developed the cracking to which I have referred.

8. [200]

   Mr Muddle submitted:

9. [201]

   But it was not for Hardi to establish any “appropriate adjustment”. It was for Greenshades and Ritter Investments to establish that they have suffered loss “because of” the impugned conduct. Their loss cannot simply be the purchase price, because loss so calculated assumes, in effect, that they got nothing of value for the purchase price of the Presidio. But they did. As I have set out, Mr Hicks’ evidence was that Greenshades used its Presidio for some four years and was actually using its Presidio “for the last month”. [17] And for the reasons I have set out, it is agreed that I should infer that Ritter Investments still has its Presidio which remains available for it to use. [18]

10. [202]

    They may have some shortcomings. The evidence shows they have fatigue cracking. But there is no evidence that this has impeded the use Greenshades and Ritter Investments has had, and will have, of the machines. [19] Nor is there evidence of whether and to what extent the cracking has diminished the value of the Presidios, nor as to whether the cracking can be repaired and if so, at what cost.

11. [203]

    To ascertain whether Greenshades or Ritter Investments has suffered loss “because of” Hardi’s misleading or deceptive conduct by reason of purchasing the Presidios that they still own, they would have had to show either that they could and would have purchased for the same price a 4WD self-propelled crop sprayer that did not have the Chassis and 4WD Issues I have described or, alternatively, that the Presidios they did purchase are worth less than they would be had they not had those issues. Either way, calculation of loss would have to take into account the use that Greenshades and Ritter Investments have made of the machines.

12. [204]

    There is no evidence before me about any of these matters.

13. [205]

    As Greenshades and Ritter Investments have not sought to prove loss on any other basis, I am unable to find they have suffered any loss on this account.

14. [206]

    Mr Muddle did not point to any evidence as to the resale value of the Greenshades’ and Ritter Investments’ Presidios. He did not mention “resale” at all in closing submissions.

15. [207]

    In an affidavit sworn during the hearing, and adduced with leave following my rejection of certain passages in Mr Hicks’ earlier affidavits, Mr Hicks said:

16. [208]

    Mr Hicks appears to be saying that a particular contract spraying job took 30 hours longer than it otherwise would have because Mr Hicks “could not get the [Presidio] to go more than 6 km per hour in some places” and because Mr Hicks adopted a practice of “spraying across the slope rather than up and down the slope”; with the consequence that extra fuel was used.

17. [209]

    In closing written submissions Mr Muddle submitted [20] that this was “presumably due to the 4WD limitations of the [Presidio], and having to adopt a slow speed to avoid loss of traction”. But there was no evidence from Mr Hicks to prove this. I rejected inadmissible assertions by Mr Hicks on this subject and granted leave to adduce evidence in proper form. That leave was taken up by the affidavit to which I have referred. There is nothing in that affidavit to the effect of Mr Muddle’s conjecture. I am not prepared to draw that inference, absent such evidence.

18. [210]

    Mr Hicks also said:

19. [211]

    However, as I have said, Mr Hicks gave no evidence of having relied on the statements by Hardi concerning the Presidio being “rugged and built for demanding conditions”. And even if such reliance could be inferred, I cannot see how this particular cost could be said to be one caused by any such statement.

20. [212]

    The only evidence Mr Ritter gave concerning loss was also given in an affidavit adduced with leave during the hearing, following my rejection of certain passages in earlier affidavits.

21. [213]

    That evidence was directed to costs said to have been incurred by reason of the Spray Rate Controller Issue. As I have concluded that Ritter Investments has not made out its case on that issue, such costs are not recoverable.

22. [214]

    Neither Greenshades nor Ritter Investments has shown it has suffered loss “because of” [21] the misleading or deceptive conduct I have found.

23. [215]

    It is therefore not necessary for me to consider Hardi’s submissions on the question of whether the amount of any recoverable loss or damage should be reduced by reason of Greenshades’ or Ritter Investments’ “share of the responsibility for the loss or damage”. [22]

Answers to the common questions

1. [216]

   I will now invite submissions as to how, in the light of these findings, the common questions should be answered. The parties should also consider whether all of the common questions remain relevant to the case pleaded by the plaintiffs.