N11193

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

WS NO. 377 OF 2020

BETWEEN:
Veronica Moke trading as A.C Unnan Trading
Plaintiff

AND:
Xavier Galaut as Salesman for Coastal Automative Limited, Madang
First Defendant

AND:
Coastal Automative Limited, Madang
Second Defendant

AND:
Carpenters Automative and Transport Limited, Trading as Boroko Motors, Lae
Third Defendant

MADANG:  NAROKOBI J
29 OCTOBER 2024; 19 MARCH 2025

CONTRACT – Warranty – Whether warranty in the contract of sale of a motor vehicle breached.

The Plaintiff bought a car from the Second Defendant who was acting as an agent for the Third Defendant. After some time, the car ran into trouble. She alleges that the Defendants should bear the costs of fixing the vehicle as it was subject to a warranty.
Held: 
(1) The Plaintiff’s reliance on the Fairness of Transaction Act 1993 is misconceived. Under s 4 of the Act, the court is required to take into account the circumstances, before, during and after the transaction, and consider whether the transaction should be re-opened on the basis of unfairness. The Plaintiff in fact seeks enforcement of the agreement, and not to re-open the agreement, which is one of the primary objectives of the Act, that is to stop the enforcement of an unfair agreement. On the evidence, the transaction was not manifestly unfair.
(2) It was found that there was a warranty, but the Plaintiff failed to prove on the balance of probability from her evidence that the warranty had not expired, as the First and Second Defendants assert. 

Counsel

Mr D Wa’au for the plaintiff
Mr B Tabai for the first and second defendants
No appearance for the third defendant

					DECISION 

1.	NAROKOBI J: The Plaintiff sues the Defendants for breach of contract, essentially for not observing the vehicle’s warranty. The claim is contested by the First and Second Defendants, and the trial was by affidavit. The Third Defendant made no appearance. 

2.	The issue that I must determine is whether as a matter of fact there was a warranty over the Plaintiff’s vehicle, and secondly, if there was a warranty, whether that warranty was breached by the Defendants?

3.	Both the Plaintiff and the First and Second Defendants filed affidavits. No affidavits were filed by the Third Defendant. I have read those affidavits.

4.	In the pleadings the Plaintiff alleges that the vehicle was covered under a 12-month warranty, and the vehicle broke down within the period of the warranty. As a result the Defendants must pay for the repairs in the sum of K18,193.50. The Plaintiff also pleads the application of the Fairness of Transaction Act 1993.

5.	The uncontested facts are that on 6 August 2019, the Plaintiff purchased a used Isuzu NPR Truck from the Third Defendant whose agent in Madang was the Second Defendant for a sum of K130,000.00. The vehicle was purchased by a friend of the Plaintiff, but under the Plaintiff’s name. By December 2019, the truck developed problems with its gear box and broke down. The Plaintiff claims that there was a breach of warranty of the truck when the Defendants refused to either repair the vehicle or to replace it.

6.	The contested facts are:

•	The vehicle sold to the Plaintiff was defective;
•	The mileage of the vehicle was still under the terms of the warranty;
•	The Plaintiff did not provide a statement regarding the vehicle problem for the Third Defendant to ascertain the vehicle’s engine problem; and
•	The First and Second Defendants had repaired the vehicle when it was brought in with mechanical problems.

7.	For the claim to progress to liability, there must in fact be a warranty over the vehicle. There is a copy of a receipt of some parts the Plaintiff bought for her vehicle stating the details of her vehicle and when the warranty will expire, see Annexure B in the Plaintiff’s first affidavit filed on 11 June 2020. The Third Defendant appears to accept that there was a warranty over the vehicle. At paragraph 26 of his affidavit, Xavier Galaut’s says that the mileage on the vehicle was 85,000km, which was well over the 25,000km mileage covered by the warranty, and therefore the Third Defendant could not assume responsibility of the vehicle’s repair. Mileage of the Plaintiff’s vehicle at 85,000km is corroborated by the Second Defendant’s mechanic Paul Kasai, who inspected the vehicle when it was brought in for repair. Xavier Galaut further stated at paragraph 23 of his affidavit that the Plaintiff was supposed to have provided a statement on the condition of the vehicle for them to send to the Third Defendant. She did not comply with this request. At paragraph 29, Xavier Galaut states that the Second Defendant’s mechanic repaired the vehicle, and the Plaintiff left happy with her vehicle. He was surprised to be served the summons.

8.	The Plaintiff’s reliance on the Fairness of Transaction Act is misconceived. Under s 4 of the Act, the court is required to take into account the circumstances, before, during and after the transaction, and consider whether the transaction should be re-opened on the basis of unfairness. The Plaintiff in fact seeks enforcement of the agreement, and not to re-open the agreement, which is one of the primary objectives of the Act, that is to stop the enforcement of an unfair contract. I am also not satisfied that the transaction was manifestly unfair after considering the evidence of Xavier Galaut and Francis Kasai on the mileage of the vehicle. For these reasons, the Plaintiff is not able to rely on the Act.

9.	In order for the Plaintiff to establish liability, the mileage of the vehicle at the time of damage is a material fact to be ascertained. The Plaintiff says that the mileage was 23,000km. Paul Kasai, a mechanic puts the mileage at 85,000km. I have looked over the evidence of the Plaintiff to see if I can verify her statement that the mileage was 23,000km. I could not find any evidence to confirm her statement, such as a photograph of the odometer reading. This is crucial. There is also no evidence from the Plaintiff stating what the mileage was at when she bought the vehicle.

10.	All in all, the Plaintiffs evidence, could not prove the contested facts in her favour, that is, that:

•	She bought a defective vehicle;
•	The mileage of the vehicle was still under the terms of the warranty;
•	The Plaintiff did not provide a statement regarding the vehicle’s mechanical problems for the Third Defendant to ascertain the nature of the mechanical fault; and
•	The First and Second Defendants had repaired the vehicle when it was brought in with engine trouble.

11.	I am therefore left with the finding that the Plaintiff has not proven on the balance of probability her claim that there was a breach of warranty. 

12.	A vehicle mileage of 85,000km suggests the likelihood of natural wear and tear, and the real possibility of other intervening factors damaging the vehicle. Given these facts, there is no unfairness for me to exercise my power under the Fairness of Transaction Act to either reopen the contract or to refer it to mediation.

13.	The claim is therefore dismissed, and each party will pay for their own costs, as I am unsure whether the First and Second Defendants provided detailed terms of the warranty to the Plaintiff when she first bought the vehicle, so that she can see for herself its clear terms.

14.	The orders of the court are that:

1.	The proceeding is dismissed in its entirety.
2.	Each party will bear their own costs.
3.	Matter is considered determined, and the file is closed.
4.	Time for the entry of the orders is abridged.

15.	Judgement and orders accordingly.

Lawyers for the plaintiff: DFW Lawyers 
Lawyers for the first and second defendants: Tabai Lawyers