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{\title IN THE COURT OF APPEAL OF THE COOK ISLANDS}{\author ruddley_e}{\operator rahkel_m}{\creatim\yr2011\mo2\dy11\hr10\min10}{\revtim\yr2011\mo5\dy18\hr13\min51}{\version12}{\edmins84}{\nofpages2}{\nofwords798}{\nofchars4551}{\*\company scims}
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{\pntxtb (}{\pntxta )}}\pard\plain \qc \li0\ri0\widctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8264766 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\b\fs24\insrsid4733946\charrsid8264766 IN THE COURT OF APPEAL OF THE COOK ISLANDS
\par HELD AT AUCKLAND
\par }\pard \ql \li0\ri0\widctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8264766 {\fs24\insrsid8264766 
\par }\pard \qc \li0\ri0\widctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8264766 {\fs24\insrsid4733946\charrsid8264766 CA 6/97}{\fs24\insrsid4733946 
\par }\pard \ql \li0\ri0\widctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8264766 {\fs24\insrsid8264766\charrsid8264766 
\par }\pard \qc \li0\ri0\widctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid9725856 {\fs24\insrsid4733946\charrsid8264766 BETWEEN}{\fs24\insrsid8264766 
\par }\pard \ql \li0\ri0\widctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8264766 {\fs24\insrsid8264766 
\par }\pard \qc \li0\ri0\widctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid9725856 {\b\fs24\insrsid4733946\charrsid9725856 RAROTONGA RENTAL LIMITED }{\b\fs24\insrsid1339681 
\par }\pard \qc \li0\ri0\widctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid1339681 {\fs24\insrsid4733946\charrsid1339681 a company incorporated at Rarotonga}{\b\fs24\insrsid4733946\charrsid9725856 
\par }\pard \qc \li0\ri0\widctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid9725856 {\fs24\insrsid4733946\charrsid8264766 Appellant}{\fs24\insrsid4733946 
\par }\pard \ql \li0\ri0\widctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8264766 {\fs24\insrsid9725856\charrsid8264766 
\par }\pard \qc \li0\ri0\widctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid9725856 {\fs24\insrsid4733946\charrsid8264766 AND}{\fs24\insrsid9725856 
\par }\pard \ql \li0\ri0\widctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8264766 {\fs24\insrsid9725856 
\par }\pard \qc \li0\ri0\widctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid9725856 {\b\fs24\insrsid4733946\charrsid9725856 TRAVIS MOORE}{\b\fs24\insrsid1339681 
\par }{\fs24\insrsid4733946\charrsid1339681 of Rarotonga, Company Director}{\b\fs24\insrsid4733946\charrsid9725856 
\par }{\fs24\insrsid4733946\charrsid8264766 Respondent}{\fs24\insrsid4733946 
\par }\pard \ql \li0\ri0\widctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8264766 {\fs24\insrsid9725856\charrsid8264766 
\par }{\b\fs24\insrsid4733946\charrsid9725856 Hearing}{\fs24\insrsid4733946\charrsid8264766 :}{\fs24\insrsid8264766  }{\fs24\insrsid4733946\charrsid8264766 16 July 1998
\par }{\b\fs24\insrsid1339681 
\par }{\b\fs24\insrsid4733946\charrsid9725856 Coram}{\fs24\insrsid4733946\charrsid8264766 :}{\fs24\insrsid8264766  }{\fs24\insrsid4733946\charrsid8264766 Sir Maurice Casey}{\fs24\insrsid9725856 
\par }{\fs24\insrsid4733946\charrsid8264766 Hillyer J
\par Dillon J}{\fs24\insrsid4733946 
\par }{\fs24\insrsid9725856\charrsid8264766 
\par }{\b\fs24\insrsid4733946\charrsid9725856 Counsel}{\fs24\insrsid4733946\charrsid8264766 :}{\fs24\insrsid8264766  }{\fs24\insrsid9725856 Mr}{\fs24\insrsid4733946\charrsid8264766  Mitchell for Appellant
\par }{\fs24\insrsid9725856 Mr M}{\fs24\insrsid4733946\charrsid8264766 anarangi}{\fs24\insrsid9725856  }{\fs24\insrsid4733946\charrsid8264766 for Respondent
\par }{\b\fs24\insrsid11298002 
\par }{\b\fs24\insrsid4733946\charrsid9725856 Judgment}{\fs24\insrsid4733946\charrsid8264766 :}{\fs24\insrsid9725856  10 August }{\fs24\insrsid4733946\charrsid8264766 1998}{\fs24\insrsid4733946 
\par }{\fs24\insrsid9725856\charrsid8264766 
\par }\pard \qc \li0\ri0\widctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid9725856 {\b\fs24\insrsid4733946\charrsid1714117 JUDGMENT OF THE COURT DELIVERED BY HILLYER J
\par }\pard \ql \li0\ri0\widctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8264766 {\fs24\insrsid9725856\charrsid1714117 
\par }{\fs24\insrsid4733946\charrsid1714117 This is an appeal against a decision of Quilliam CJ given in the High Court of the Cook Islands at Rarotonga on 2 September 1997
\par }{\fs24\insrsid9725856\charrsid1714117 
\par }{\fs24\insrsid4733946\charrsid1714117 The respondent purchased a Lada station wagon from the appellant and took delivery on 13 April 1994.}{\fs24\insrsid8264766\charrsid1714117  }{\fs24\insrsid9725856\charrsid1714117 H}{
\fs24\insrsid4733946\charrsid1714117 e paid the sum of $14,500 for the vehicle.}{\fs24\insrsid8264766\charrsid1714117  }{\fs24\insrsid4733946\charrsid1714117 The statement of}{\fs24\insrsid9725856\charrsid1714117  }{\fs24\insrsid4733946\charrsid1714117 
claim alleged three causes of action but the parties agreed that there was only one issue in the matter and that is whether the car was of merchantable quality.}{\fs24\insrsid4733946 
\par }{\fs24\insrsid9725856\charrsid8264766 
\par }{\fs24\insrsid4733946\charrsid8264766 Section 16(}{\fs24\insrsid11298002 b) of the Sale of Goods Act 1908}{\fs24\insrsid4733946\charrsid8264766  which applies in the Cook Islands is as}{\fs24\insrsid9725856  }{\fs24\insrsid4733946\charrsid8264766 follows
}{\fs24\insrsid9725856 :}{\fs24\insrsid4733946 
\par }{\fs24\insrsid9725856\charrsid8264766 
\par }\pard \ql \li720\ri0\widctlpar\faauto\adjustright\rin0\lin720\itap0\pararsid9725856 {\fs24\insrsid4733946\charrsid8264766 "Where goods are bought by description from a seller who deals i}{\fs24\insrsid9725856 n good}{\fs24\insrsid13383284 
s of that description (whether h}{\fs24\insrsid9725856 e is th}{\fs24\insrsid4733946\charrsid8264766 e manufacturer or not), there is an implied condition that the goods shall be of merchantable quality:}{\fs24\insrsid4733946 
\par }\pard \ql \li0\ri0\widctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8264766 {\fs24\insrsid9725856\charrsid8264766 
\par }\pard \ql \li720\ri0\widctlpar\faauto\adjustright\rin0\lin720\itap0\pararsid9725856 {\fs24\insrsid1714117 Provided that if the buyer h}{\fs24\insrsid4733946\charrsid8264766 as examined the goods, there shall be no implied}{\fs24\insrsid9725856 
 condition as regards defects w}{\fs24\insrsid4733946\charrsid8264766 hich such examination ought to have revealed:}{\fs24\insrsid4733946 
\par }\pard \ql \li0\ri0\widctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8264766 {\fs24\insrsid9725856\charrsid8264766 
\par }{\fs24\insrsid4733946\charrsid8264766 The case}{\fs24\insrsid9725856  was heard on 1}{\fs24\insrsid4733946\charrsid8264766  September 1997.}{\fs24\insrsid8264766  }{\fs24\insrsid4733946\charrsid8264766 
The transcript of the evidence was not available but counsel have helpfully provided us with an agreed record of evidence. This shows that the car was a new car and that the price paid was $14,500.}{\fs24\insrsid8264766  }{\fs24\insrsid7826950 Th}{
\fs24\insrsid4733946\charrsid8264766 e respondent took possession of the car on 13 April 1994 and shortly thereafter rust appeared on the car.}{\fs24\insrsid8264766  }{\fs24\insrsid4733946\charrsid8264766 
There was some difference between counsel as to whether the rust appeared on the car within or after 6 months of delivery, but both counsel accepted that the rust appeared "at about 6 months".}{\fs24\insrsid4733946 
\par }{\fs24\insrsid9725856\charrsid8264766 
\par }{\fs24\insrsid4733946\charrsid8264766 The respondent took the car to a representative of the appellant who said the car must have rusted as a result of the car being kept outside and not being regularly cleaned a}{\fs24\insrsid7936743 
nd waxed. The respondent said h}{\fs24\insrsid4733946\charrsid8264766 e did not clean the car but that his wife did and his wife gave evidence that she regularly cleaned and waxed the car.}{\fs24\insrsid4733946 
\par }{\fs24\insrsid9725856\charrsid8264766 
\par }{\fs24\insrsid9725856 A quotation was produced from}{\fs24\insrsid4733946\charrsid8264766  Auto Painters Limited for the cost o}{\fs24\insrsid9725856 f dealing with the rust in the }{\fs24\insrsid1714117 sum}{\fs24\insrsid4733946\charrsid8264766 
 of $2,650 but this was not obtained until }{\fs24\insrsid7936743 18}{\fs24\insrsid4733946\charrsid8264766  November 1996.}{\fs24\insrsid8264766  }{\fs24\insrsid4733946\charrsid8264766 
It appears that neither party did anything to deal with the rust at that time.}{\fs24\insrsid8264766  }{\fs24\insrsid4733946\charrsid8264766 
The learned Chief Justice at the request of the parties inspected the vehicle and said that there was no doubt that its present (ie 2 September 1997) condition was "appalling".}{\fs24\insrsid8264766  }{\fs24\insrsid4733946\charrsid8264766 
He drew however the inference only, that at the time he inspected the car it }{\fs24\insrsid9725856\charrsid8264766 would}{\fs24\insrsid4733946\charrsid8264766  be difficult to accept that a buyer could be found for it for more than a nominal amount.}{
\fs24\insrsid8264766  }{\fs24\insrsid4733946\charrsid8264766 He did}{\fs24\insrsid9725856  }{\fs24\insrsid4733946\charrsid8264766 comment that it was unfortunate that remedial work was not carried out by either the appellant or the respondent.}{
\fs24\insrsid4733946 
\par }{\fs24\insrsid9725856\charrsid8264766 
\par }{\fs24\insrsid4733946\charrsid8264766 He held that because of the very early appearance of the rust there was no escape from the conclusion that there must have been some inherent defect and that the car could not have been of merchantable }{
\fs24\insrsid12660685 q}{\fs24\insrsid4733946\charrsid8264766 uality.}{\fs24\insrsid8264766  }{\fs24\insrsid4733946\charrsid8264766 He said however that that did not mean that the appellant would be liable on the basis of the present condition of the car.
}{\fs24\insrsid8264766  }{\fs24\insrsid4733946\charrsid8264766 He said the respondent was aware of what had happened and was obliged so far as he reasonably could, to minimise his loss.}{\fs24\insrsid8264766  }{\fs24\insrsid16000908 Equally h}{
\fs24\insrsid4733946\charrsid8264766 e said that the appellant could when shown the initial rust have taken more positive steps to deal with the problem.}{\fs24\insrsid8264766  }{\fs24\insrsid4733946\charrsid8264766 
It was clear that in Rarotonga the conditions are likely to have a much greater effe
ct on a vehicle than the conditions experienced in New Zealand, but that for rust to have started to appear within such a short time after delivery of the vehicle the respondent must be entitled to some recompense. He came to the conclusion that a proper 
amount to recompense the respondent would be the sum of $2000 and gave}{\fs24\insrsid9725856  }{\fs24\insrsid4733946\charrsid8264766 
judgment to the respondent for that amount together with costs, disbursements and witness expenses as fixed by the Registrar.}{\fs24\insrsid4733946 
\par }{\fs24\insrsid9725856\charrsid8264766 
\par }{\fs24\insrsid4733946\charrsid8264766 The appellant submitted that there was no proper evidential
 basis for making a finding that the vehicle was not of merchantable quality. But on the evidence as set out above we are of the view that there was adequate evidence to justify such a finding. The inspection of the vehicle was used by the Chief Justice o
nly to understand the evidence that was given to him as to the condition of the vehicle at the time he saw it. The finding as to merchantable quality was based on the fact that the rust appeared so early.}{\fs24\insrsid4733946 
\par }{\fs24\insrsid9725856\charrsid8264766 
\par }{\fs24\insrsid4733946\charrsid8264766 The appellant submitted that the learned Judge erre
d in reaching conclusions that were founded on presumptions and assumptions that had no evidential foundation. But in our view there was adequate basis for the findings made.}{\fs24\insrsid4733946 
\par }{\fs24\insrsid9725856\charrsid8264766 
\par }{\fs24\insrsid4733946\charrsid8264766 Counsel for the respondent accepted that the respondent was not seeking damages of $7000 for breach of the condition as to merchantable quality as the learned Chief}{\fs24\insrsid9725856  }{
\fs24\insrsid4733946\charrsid8264766 Justice appeared to believe, but that mistake was not material to the outcome of the case in the High Court.}{\fs24\insrsid4733946 
\par }{\fs24\insrsid9725856\charrsid8264766 
\par }{\fs24\insrsid9725856 In all the circumstances w}{\fs24\insrsid4733946\charrsid8264766 
e are of the view the decision was a proper one and the appeal is dismissed with costs of $2000 to the respondent to cover appearances in the lower Court and in this Court plus disbursements and witnesses expenses to be fixed by a Registrar.}{
\fs24\insrsid4733946 
\par }{\fs24\insrsid9725856\charrsid8264766 
\par }\pard \qc \li0\ri0\widctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid9725856 {\b\fs24\insrsid4733946\charrsid9725856 By the Court
\par }\pard \ql \li0\ri0\widctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8264766 {\fs24\insrsid9725856 
\par }\pard \qc \li0\ri0\widctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid9725856 {\b\fs24\insrsid9725856\charrsid9725856 P G Hilly}{\b\fs24\insrsid4733946\charrsid9725856 er J
\par }}